Microsoft and Skype: The Business Value of Protecting a (Cash-Gushing) Utility
The Agile Manager
MAY 13, 2011
Microsoft's acquisition of Skype generated a lot of comment this week, much of it negative. As an investment, Skype has to put up some pretty juicy numbers to justify an $8.5b valuation. Reuters Breakingviews pointed out that the price is 400 times Skype's operating income last year. To achieve an annual ROI of 10%, Skype has to grow 40-fold. Heady numbers, to be sure.
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