Microsoft Completes $8.5 Billion Skype Acquisition

Microsoft has finally completed the Skype acquisition, 5 months after it first announced it. While the boards of both Skype and Microsoft approved the acquisition right away, there was the risk of regulatory authorities playing spoilsport.

Eventually, the deal was approved by regulatory authorities in both the U.S. and Europe. It is still pending regulatory approval in a few small countries.

Skype is a phenomenal product and brand that is loved by hundreds of millions of people around the world. We look forward to working with the Skype team to create new ways for people to stay connected to family, friends, clients and colleagues — anytime, anywhere,said Microsoft CEO Steve Ballmer.

Skype will be absorbed into a new division, and will continue to offer Skype in its current form to consumers worldwide. Going forward, Microsoft plans to integrate Skype’s VOIP and video capabilities into various products like Microsoft Windows, Office, Xbox and Windows Phone.

It may also enter the enterprise VOIP and video conferencing market, which is currently dominated by Cisco.

With the Skype acquisition, Microsoft is also in a better position to compete with Apple’s Facetime and Google’s Google Voice.

Check out the official press release by Microsoft: Microsoft Officially Welcomes Skype

Skype For Android Updated; Adds Video Calling Support For 14 New Devices!

Skype has just updated its Android app to add support for certain new devices, along with adding certain other enhancements.


The new version of Skype (v2.5) brings support for video-calling for 14 additional Android devices, bringing the tally to a total of 41.

Below is the list of all the supported devices :

  • Samsung Galaxy Tab 10.1
  • HTC Nexus One
  • HTC Shooter
  • Sony Ericsson Xperia Live with Walkman
  • Sony Ericsson Xperia neo V
  • LG Optimus Black
  • LG Optimus 3D
  • LG Optimus 2x
  • Motorola Photon
  • Motorola Droid 3
  • Motorola Bionic
  • Motorola Xoom
  • Motorola Atrix
  • Acer Iconia

It’s nice to see Skype adding support for Android devices, which lack a front facing camera. Other new features in this update include improved support for Bluetooth headsets, quite a few bug fixes and performance improvements. Skype users can now also switch between portrait and landscape call whilst on a video call, and can also zoom in on the screen via double tapping.

The new update will also not show advertisements to users who have Skype credits in their account. Hopefully, the new version of Skype will also be light on battery usage.

Android users can head over to Android Market to download the latest version of Skype. Alternatively, they can scan the QR Code below-


iPhone Users Vulnerable To Address Book Snarfing Via Skype XSS

Skype users on iOS devices should be on the look out for malicious users who intend on stealing their address book.

A vulnerability affecting Skype 3.01 on iOS devices, including the iPod Touch and iPhone, gives an attacker the ability to secretly upload the entire contents of your address book. The hole is due to a non-validated input field in the client, instead of the contents being displayed to the user, they are executed. Coupling XSS with sandbox permissions that do not allow for fine-tuned access control within apps, provides a way for an attacker to steal the contents of an unsuspecting user’s address book.

Skype has been criticised numerous times over identical vulnerabilities in their desktop software, that allowed for remote code to be executed on a victim’s computer. The flaw is one that Skype has had reported numerous times, fixed numerous times, yet they have not completely audited the applications before release.

Phil has detailed the attack performed against an iPhone 4 running iOS 4.3.5 and has indicated that the vulnerability was reported to Skype over a month ago. Hopefully a fix is in the works, but more importantly, hopefully Skype will perform a full check instead of simply throwing input sanitising on the vulnerable text field.

Skype Buying GroupMe Isn’t for Windows Phone

Microsoft buys Skype and Skype buys GroupMe. Using a=b and b=c; Microsoft effectively bought GroupMe. Which sounds plausible and fine. As the news spread Windows Phone 7 integration possibilities were being thought. I decided to wait it out hoping either companies would explain their strategy. Unfortunately, neither have. So here’s my theory…

Windows Phone 7 has a lot of thought and focus on what phones are for—communication. Clubbing contacts into groups and sending group emails or texts is a Windows Phone 7 Mango feature. In this scenario, GroupMe’s purchase looks out of place for Windows Phone (and Microsoft). Secondly, Microsoft’s cozy relationship with Facebook and the tight Windows Phone 7 integration would suggest Facebook Messenger on WP7 to come out soon.

GroupMe has a Windows Phone 7 client, as a result, any immediate platform integration or even Skype integration for the phone won’t be happening. Reading Michael Arrington’s article on TechCrunch, it is clear that Skype was already eyeing GroupMe while talks of acquisition with Microsoft were happening. Skype introduced group video chats not long ago and has phone calling. It makes a lot of sense for Skype as a platform to add text messaging in addition to voice communication. Putting all of this together it suggests:

  • Skype bought GroupMe for the Skype platform (and it doesn’t have anything to do with WP7)
  • It’s a good old talent acquisition
The New York based GroupMe team has individuals who’ve worked with products like Tumblr and the growing Gilt Groupe. Though this deal has to have Microsoft’s blessings, it’s a Skype deal for Skype as a platform. Not Microsoft and Windows Phone.


Skype for iPad Released Worldwide

It looks like our dreams are coming true. The official Skype app for iPad has begun its rollout to users. While it is currently only available to users in New Zealand, it is expected to make its way to other time zones during the next 24 hours. Many apps have come out this way in the past, according to TUAW.

We first covered the Skype iPad app back in June, when it was originally confirmed to TUAW. It is unclear as to why the app has been delayed till now. This new iPad version of Skype supports all the features of its iPhone brother. It looks like all features short of two-way video calling are supported on the original iPad, with that being a feature of the iPad 2.

TUAW reports that the iPad app is separate from the iPhone app, but will keep the same free price tag. It will also be capable of making calls over both 3G and Wi-Fi.According to previous reports, the iPad app will not be capable of file sharing.

Update:  It looks like Apple has decided to skip all that timezone non-sense and give the app to every user at once. You can pick it up in the App Store now. I have it downloaded, and will update with my impressions after I test it out. Stay tuned!

If you already have the Skype app for iPad, let us know what you think about it. If not, then let us know if you are excited about video calling coming to the iPad. Leave a comment below to share your thoughts.

Facebook Announces New Group Chat, Buddy Lists, and Video Calling

In what Mark Zuckerberg called the start to “Launching Season 2011″, Facebook has announced that they are launching a number of products over the coming months. Zuckerberg said that the goal of Social Networking has shifted from connecting people to building apps for people to use. He claimed that the future of internet use is based on social infrastructure.

During his announcement, Zuckerberg confirmed that Facebook has reached 750 million users. At the same time, he emphasized that this is not the metric that Facebook wants to watch. Their goal now is to improve the way that people share.

To that end, Facebook is launching a handful of new products today. The first major announcement was a new form group chat. If you use Facebook groups, then you know you can already chat with whole groups. You can create an ad-hoc group by adding more than one Facebook friend in the Facebook chat interface. They claim that ‘a lot of people requested’ this service.

The next feature announced was the ability to find people to chat with easier. Given that you have the available screen space, you can now see a ‘buddy list’ of Facebook friends. This will allow you more easily find the people you want to chat with. The new sidebar will adjust to fit the size of your screen.

The last announcement was Skype integration. This was rumored to be the most likely announcement, and it came true. If you want to initiate a Video chat on Facebook, you simply click the video call button in your Facebook chat window. If the person who you are trying to call doesn’t have the plugin installed, they will be automatically prompted to do so. There is also a video call button on profile pages.

All three of these features will be rolling out automatically over the next few weeks. If you don’t want to wait for these products, you can get it now.


Skype releases Version 5.2 for Mac

The ever popular text and video chatting service Skype has released an update for their OS X client. Version 5.2 brings a few new features to the main silent that have been part of the beta version since 5.0. These include group screen sharing as well as group video calling. Unfortunately, in order to take advantage of either, you will need to be a Skype Premium subscriber.

OS X Skype Client Screen Sharing

For the non-premium users, there are a few improvements that make the upgrade from 5.1 seem like a good idea. For instinct, the new client seems to have fewer bugs than its predecessor. There are also small changes to the UI, like the ability to hide the sidebar to focus on your conversation. You also have the ability to pop-out the cider controls for video calls.

The changes in version 5.2 should appeal to power-users, especially the Premium users who use Skype for video conferencing. The new screen-sharing options (which are Mac exclusive for the time being) will make the Skype a better productivity tool. It is good to see that, in the wake of Microsoft’s acquisition of Skype, the other platforms aren’t being totally ignored.

The downside to 5.2 is that the UI that Skype introduced in 5.0 is largely unchanged. The popular opinion is that it is too bulky of an app. A simple Google search will result in a downloadable copy of Skype 2.8, that last “good” version of Skype for the Mac. If you aren’t a premium user, then the upgrade isn’t really worth your time. However, the new feature sonly require one premium user to activate, you may want to pick up 5.2 incase a request comes your way.



Skype for Android Modded to Support Video-calling on Samsung Galaxy S II and Other Androids

It was just yesterday that Skype released an updated version of their app on the Android market. The updated version of the app brought a new UI, smoother performance, and two-way video calling for only 4 handsets, two of which are not even available widely.

Now, pulser_g2, a popular developer over at XDA forums, has released a modded version of the Skype apk. This modded version of Skype allows most of the Android handsets with a front-facing video camera to make two-way video calls.


The modded Skype apk has been tested on the Samsung Galaxy S II, Galaxy S, HTC EVO 3D, HTC Sensation and the Thunderbolt. Other Android phones with front-facing cameras have not been tested, but the apk should work on them as well. The modded Skype apk can be downloaded from here.

In other Skype related news, Skype’s website now has a banner teasing video-calling on Verizon’s 4G LTE phones. Yes, that includes the Motorola Droid Pro, the Thunderbolt and the Droid X2 as well.

The banner means that Skype is nearly ready to release a video-calling compatible version of Skype for Thunderbolt. However, I am guessing, the company it is still waiting for HTC to roll out the Android 2.3 Gingerbread update before that.


Skype For Android Updated With A New UI; Also Brings Two-Way Video Calling

Android users very well know that the official Skype application for Android is nothing but a joke. The app is slow, and does not support video calling, which is one main reason why people use Skype.

A major over-haul of the app was long due, and it has finally landed on the Android Market! I find it a bit ironic since when Microsoft purchased Skype, I gave up the very thought of Skype’s Android app ever being updated.


The new version of Skype (v2.0) brings with it a whole new, and much improved UI, along with support for SMS. The application now also supports two-way video calling via Wi-Fi or 3G. However, two way video-calling feature is limited to only four handsets at the moment. Those four handsets include the Google Nexus S, Sony Ericsson Xperia Pro and Neo, and the HTC Desire S.

Yes, Skype did not bother to add support for popular phones with front-facing camera like the EVO 4G, Samsung Galaxy S/ S2, EVO 3D, but added them for two phones which are hardly available anywhere.

Hopefully, Skype will soon release an updated version of the application with support for video calling on more Android handsets. Here is the link to the updated version of Skype for Android.

How Skype Screwed its Employees Out of their Equity Option Grants

Microsoft announced that it would be acquiring Skype for $8.5 billion last month. It was good news for everyone involved with Skype, but ever since the deal was announced, it has been fraught with some or the other problem. Many analysts and bloggers have already bashed Microsoft for spending such a huge amount to buy Skype at a huge premium over its last valuation of approximately $3 billion in 2009.

Recently, Skype came under fire, for allegedly firing senior executives just weeks before the sale was finalized, effectively cutting them off just before a huge payday. Apparently, Silver Lake Partners, the majority owner of Skype stood to make more money, which would explain their motivations. But soon after these reports leaked, many anonymous Skype investors stated on various blogs that the firings were handled by Tony Bates, Skype’s CEO, not any of the investors.

Now, it seems that some previous employees of Skype are getting screwed out of their equity grants by Silverlake Partners, the PE firm which had majority ownership of Skype, and stands to make a huge windfall from the Microsoft deal.

Case in point: Yee Lee, an employee at Skype who quit some time back, just learned that all his vested options had been rendered worthless after Sliverlake Partners secured to buy back the vested options at the grant price, effectively taking away all the profits that Lee could have made by exercising those options.

The point of a vesting schedule is to keep employees working with the company, but once options have been vested, the company cannot take them back. In this case, Skype has done exactly that to all employees who left Skype with options that had already vested, thus screwing them out of their rightful earnings.

Everyone knows, that the currency of a startup is equity, not cash. Equity in a company is what motivates us to join other startups, taking substantial salary cuts to work in a startup, instead of taking up a comfortable job in BigCo, or starting up ourselves. Everyone joining a startup is looking for that big payday which comes when a major liquidity event like an IPO or acquisition happens.

Even if Silverlake Partners is legally in the right, having mentioned the vested option buyback in the option grant agreement somewhat surreptitiously, the point is, that it isn’t a standard practice. This is the first time any PE/VC firm has done anything like this. While they stand to make billions from the deal, acting in this manner taking away a few million from their employees just makes them look petty.

In Lee’s own words: “Now, I’ve seen my share of legal documents for tech companies. I’ve worked in Valley tech companies for over 15 years, have founded startups, done VC financings, and invested in companies. None of that prepared me for the kinds of legal shenanigans that the PE guys at Silver Lake pulled because I had never come across those kinds of terms before, let alone the fact that these clauses were hidden as one-liners in otherwise pretty standard-looking documents”.

I just hope that this doesn’t set a precedent for startups in Silicon Valley or anywhere in the world. There is a certain level of trust that exists in the startup ecosystem, and if there are more such incidents, it would be very detrimental to everyone involved – be it entrepreneurs and early employees who would have to waste more time on their due diligence, going over each and every clause of the contract, before they finalize their funding, and investors who have worked hard to gain the trust of entrepreneurs over the years, who might have to work even harder to regain it.

The whole fiasco can be summed up perfectly by Lee’s statement: “Even as Skypers were celebrating the huge potential of the Microsoft deal, the PE bankers were sharpening their knives and plotting which employees to fire in order to maximize profits and minimize payouts to non-owners. Seriously, how greedy do you need to be to make $5B and still try to screw the people who made that value possible? I mean, Silver Lake is trying to hyper-optimize their returns to the point that they’re trying to deny employee payouts that amount to less than 0.3% of the returns that they’ll get from the deal. Srsly. Really?

So, just be warned: Silicon Valley startup folks may think we’ve had hard dealings with venture capitalists… But in my opinion, VC greed pales in comparison to the level of greed exhibited by the Silver Lake private equity firm.”