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Skype Buys Microsoft BizSpark Partner, Mobile Messaging Company GroupMe

• By Gladys Rama
• August 23, 2011

Microsoft BizSpark partner GroupMe is being acquired by Skype, a major provider of global videoconferencing and voice communication services. Skype is itself in the process of being acquired by Microsoft for $8.5 billion.

Terms of the GroupMe acquisition will not be disclosed, according to Skype's announcement on Monday. However, the site Betabeat, citing sources familiar with the deal, have estimated it to be worth "more than $50 million and less than $100 million," while an AllThingsD article says the deal is closer to $85 million.

Founded in 2010, New York-based GroupMe lets mobile users separate their contact lists into groups, and then send messages, start conference calls or share photos with all the members of a specified group. The service is free and works on smartphones running Windows Phone 7, Google Android, Apple iOS and BlackBerry OS. For U.S. users, it also works on SMS-based phones.

According to GroupMe's blog post announcing the deal, "GroupMe will remain in New York, team intact, working on our standalone application. The major difference will be that we will now have access to Skype's 175 million monthly connected users."

The announcement of GroupMe's acquisition has led to speculation regarding how its group-messaging technology will position Skype's -- and, by extension, Microsoft's -- mobile offerings against competitors. Google has made some inroads into group-messaging with its fledgling social networking site, Google+, which includes a "Huddle" mobile app for conference calling, a "Hangouts" feature for video chatting, and a share-by-group feature called "Circles."

In an interview with Fast Company, Sandhya Venkatachalam, Skype's vice president of corporate development, indicated that the GroupMe acquisition comes with Microsoft's blessing.

"This is something that's very important for Skype and for our mobile and overall social strategy," Venkatachalam is quoted as saying. "Of course, if and when the acquisition with Microsoft closes, we want to bring this functionality and this strategy to Microsoft and their mobile offerings." 

Microsoft's acquisition of Skype, the largest in Microsoft's history by value, is pending European regulatory approval (it received U.S. government approval in June). According to comments made by Microsoft CEO Steve Ballmer, when the deal closes, Microsoft plans to fold Skype's video and voice technologies into several of its products, including Outlook, Xbox, Kinect, Messenger, Hotmail and Lync.