In August of 2007 Microsoft made what was widely considered a very risky move when the company shelled out $6 billion to buy online advertising firm aQuantive. That deal has generally been labeled a flop since then as it's done little to increase Microsoft's revenues, while online losses have continued to mount.
Now Microsoft is ready to eclipse that deal (which then was the largest in company history) with a reported $8.5 billion purchase of Luxembourg-based Internet phone company Skype.
The Wall Street Journal first reported the deal Monday evening.
Buying Skype--a service that connects millions of users around the world via Internet-based telephony and video-- would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.
The deal would certainly shore up Microsoft's Internet-based communications. Although some observers have pointed out that a lot of the same could be accomplished with the partnership between Microsoft and Nokia.
Still, the real specter hovering over the deal is aQuantive.
Last year, The Puget Sounds Business Journal had this to say about the how the acquisition had shaped up for Microsoft:
Three years after Microsoft agreed to buy Seattle-based digital advertising company aQuantive, the Redmond company's ad revenues have barely budged, its online losses have soared, many of aQuantive's top executives have left, and one of aQuantive's biggest units has been sold.
The Skype deal hasn't officially been announced yet. And the details of it, including the final price, may change. But considering that Facebook, Google and Cisco were supposedly also very interested in buying Skype, one can deduce that the purchase figure can't fall much if at all.
Whatever the final price, it's going to take a whole lot of cheap Internet phone calls to make up for the billions Microsoft is putting up now.