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DOJ approves Microsoft’s acquisition of Skype

Skype video call

The U.S. Department of Justice has tacitly approved Microsoft’s recently-announced plan to acquire VoIP operator Skype, granting “early termination” to its review of the proposed takeover. The early termination action essentially means that the Justice Department found no reason to believe the acquisition would harm competition or negatively impact consumers.

Last month, Microsoft announced plans to pay some $8.5 billion to take over Skype—the deal values Skype at more than three times the amount equity firm Silver Lake paid for Skype when the operation was spun out of eBay back in 2009. Although Microsoft seems bullish on the idea—and apparently brought founder Bill Gates back into the loop to seal the deal—market watchers are wondering exactly how Microsoft will leverage Skype. Although Skype is by far the dominant player in VoIP communications, the company hasn’t so far hasn’t found a good way to turn its service into a solid revenue stream. Skype does charge for calling services to and from landlines and mobile phones, but since day one many of its users have opted for free Skype-to-Skype communications.

Microsoft so far has announced only non-specific plans to expand the existing Skype brand, and operate Skype as a separate division within the company. Industry watchers have speculated Microsoft will integrate Skype with the company’s digital advertising and business conferencing offerings.

[Correction: The original version of this article said the Federal Trade Commission had approved the acquisition; this was a misunderstanding based on the FTC processing the early termination listing on behalf of the Justice Department.]

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