Mergers & acquisitions

CES 2011: Skype Buys Up Qik for Mobile Push

LAS VEGAS -- 2011 International CES -- Internet telephony giant Skype Ltd. will acquire popular video streaming app developer Qik Inc. , Skype announced at an International CES press conference today.

Since the deal was just closed this morning, Skype didn't confirm a purchase price, but the rumored price tag is between $100 million and $150 million.

Both the companies had banner years last year. Skype brought in record numbers, announced its intentions to IPO, and racked up partnerships with major wireless operators. Qik, too, saw its growth explode as its two-way video chat hit the High Tech Computer Corp. (HTC) (Taiwan: 2498) Evo 4G on Sprint Corp. (NYSE: S), helping the company to rack up 5 million users. (See Skype: In Numbers, Skype Dials Into a Public Future , and Qik Touts Video Chat Explosion on Sprint's EVO.)

This is Skype's first acquisition and it plans to use Qik's assets to augment its current play in real-time communications on mobile, as well as to add on premium services, Skype's brand-new CEO, Tony Bates, said at the press conference. Qik's engineers have experience optimizing video transmission for wireless networks, which is another important advantage Bates said Skype will take advantage of.

"They have a great model," said Bates, who told attendees that mobile is Skype's biggest focus for the year. "Over time, we will create synergies."

Why this matters
Both Skype and Qik landed executives on Light Reading Mobile's top people to watch list for 2011, so it's also a merger of minds. Bates made the cut because of Skype's potential role in lending voice services to Long Term Evolution (LTE), and Qik's co-founder and senior VP or product Bhaskar Roy did for being at the heart of the streaming mobile video revolution. (See Leading Lights: Mobile Services/Apps Finalists.) Qik also nabbed a spot in Light Reading's Leading Lights best new mobile apps finalists. Suffice it to say, we're on board with this acquisition. (See 2010 Top Ten: People to Watch in Mobile.)

The wireless operators should be excited too, although the companies combined could mean an onslaught of even more streaming video traffic. Bates said that both Skype and Qik "partner well" with operators, like KDDI Corp. and Verizon Wireless for Skype, and they plan to continue to do so.

For more
For more on how Qik and Skype, on their own, have kept the operators on their toes, check out the following stories:

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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