Why did Microsoft spend $8.5bn on Skype? (Detailed Report)

In a bold move, Microsoft acquires Nokia and catapults itself to the top of the smartphone world. The full integration of Windows Phone 7 software into Nokia hardware will result in a better user experience for customers, a zero-fragmentation platform for developers, easier deployment of a smaller number of SKUs for retailers, and more reliable update management for carriers.

It's worked before. Microsoft's hardware/software integrated devices, Xbox and Kinect, are enjoying strong revenue growth and great margins: $1.9bn revenue last quarter, 50% more than last year, with 10% operating profit.

In a prepared statement, Microsoft CEO Steve Ballmer says:

I welcome Stephen Elop back into my executive staff. His brief leave of absence has allowed us to more fully explore the possibilities of combining the best smartphone hardware, Nokia's, with the best OS, Windows Phone 7. Google's anticompetitive Android free and open licensing practices unfairly tilted the playing field against our better product; they made it impossible for us to sell Windows Phone 7 software. Instead, we're now ready to do battle with Apple from a superior position: a stronger product carrying the Windows Everywhere flag, wider carrier distribution around the world, and more retail partners in US, Europe, and BRIC nations. With our acquisition of Nokia, we're now a $100bn company, back where we belong: at the top of the high-tech industry.

When I woke up, I heard a different story: Microsoft bought Skype for $8.5bn.

We all know Skype: free voice and video calls from computer to computer, plus paid services if you need to dial a phone. As Skype prepared for its long-awaited IPO, we got financial data from their S-1filing with the SEC. S-1s are always instructive: This is usually the first time a private company opens the kimono – and the SEC watches closely as you prepare to sell shares to widows and orphans.

The Profit & Loss statement in Skype's S-1 looks like this:

With revenue of $860m in 2010, Skype's operating profit is a modest $20m, with a net loss of $69m due to interest expenses stemming from $686m in long-term debt. Except for in 2008, when they saw a $42m profit, Skype has racked up huge losses, including $1.4bn in 2007 and $370m in 2009.

(Technically, these figures straddle two different corporate structures because of Skype's complicated history. Started in 2003 as an independent European company, Skype was acquired by eBay in 2005 for a price pegged between $2.6bn and $3.1bn. After the acquisition, eBay discovered its ownership of Skype was "encumbered": A crucial piece of Skype's technology was owned by another company, Joltid, which was essentially in the hands of Niklas Zennström, one of Skype's founders. eBay settled with Joltid for about 14% of Skype. This caused wags to say the crafty Skype founders sold the company twice – and it certainly didn't make the ex-management consultants running eBay look so sharp. In 2009, eBay sold 70% of Skype to private equity and venture investors in a transaction that valued the company at $2.75bn.)

Why did Microsoft pay $8.5bn – 10 times the company's revenue – for a business that has changed hands so many times, never made money, and comes with substantial debt? (Admittedly, the $686m debt number is manageable – for Microsoft).

One eloquent answer comes from Brad Horowitz, a partner at the Andreessen Horowitz venture firm started by Netscape's founder. Horowitz invokes the network effect: A large number of users attracts more users and so on, in a kind of gravitation well:

500,000 new registered users per day – 170 million connected users – 30 million users communicating on the Skype platform concurrently – 209 billion voice and video minutes in 2010

And he concludes:

Today, I tip my hat to an old rival, Microsoft. By acquiring Skype, Microsoft becomes a much stronger player in mobile and the clear market leader in internet voice and video communications. More importantly, Microsoft gets a team, ably led by the exceptional Tony Bates, that can compete with anyone.

Well, this is a nice encomium to the guys who transformed the venture firm's $50m investment in Skype a few months ago into a $150m payday. My own venture investor hat is tipped to MM. Andreessen and Horowitz.

But not so much to Steve Ballmer.

Looking at Microsoft's recent quarterly numbers, we see the continuation of a now old and getting older tradition: losses in the Online Services Division. Only a few weeks ago, TechCrunch wondered: When Will Microsoft's Internet Bloodbath End? Business Insider provided a vivid illustration for the problem:

In just the past 12 months, Microsoft has lost $2.5bn in its online business. They spend $2 to make $1 in revenue. Buying and "integrating" Skype will make the picture even redder.

So, again, why spend $8.5bn on Skype?

The official explanation is that Skype will be targeted at professional users. For these, Microsoft already has a product called Lync, although not many have heard of it. And they have Messenger for consumers. (Actually, it's Windows Live Messenger for Windows and Microsoft Messenger for the Mac.) I don't think it's unfair to ask how, how well, and when Microsoft's Grand Unified Messaging platform will effectively exist, and how it will be monetised.

Given Microsoft's track record, there isn't much evidence of its ability to perform such integration, nor of its ability to move a big platform forward at a competitive pace, certainly not faster than what Google seems able to do with Google Voice, Talk and Google Video for Business.

The theory must be that every Windows PC will come with "Skype inside". But that isn't much progress: There are already 170 million connected Skype users, and 500,000 new registrations everyday. And imagine how carriers will react when they see a Skype client bundled with every Windows Phone 7 device, further pushing them towards their preordained destination: dumb pipes.

Today, Skype is joyfully used in both consumer and business environments. It's not perfect, but the price is right and Skype is now a verb. The next thing we know, Microsoft will take a good if imperfect service and "improve" it by integrating it with Office or SharePoint (a good product on its own). And, at some point, Microsoft will try to make us pay for it. In more ways than one.

But, again, the history isn't there. Microsoft's ability to successfully charge for a formerly free product is lacking.

Reactions to the Skype deal have been negative, if not downright derisive. Many see the Skype acquisition as more evidence that Microsoft can't innovate, or even effectively copy and out-implement any more. One local exec asked, rhetorically, how much it'd take to re-implement Skype. $100m? $1bn? It's not a question of money. Microsoft spends tons in R&D: 15% of sales, about $9bn per year. (Apple spends 2% of revenue, less than $2bn.) Think of iTunes: it's been out there for close to 10 years and there's no iTunes clone coming out of Redmond. Microsoft has to buy what it no longer has the people or the culture to create – or copy.

David Pogue, the NY Times' tech guru, thinks this acquisition will go where so many went before: to failure by mediocrity and to poisoning by matrix management.

Ben Brooks, a Microsoft shareholder – and not the disgruntled kind – comments on the Skype deal and concludes: The Ballmer Days Are Over. Perhaps, but who can tackle the job of turning Microsoft around?

In last year's 30 May Monday Note, I wrote Ballmer had opened the "Second Envelope". He was running out of explanations: first blame your predecessor, then fire a few subordinates. Next, you're out of excuses and out the door.

Since then, a few more subordinates have decided to "spend more time with their families": CTO Ray Ozzie, who wrote a long, long farewell memo (don't do that, it doesn't make you look good); tablet executive Bill Mitchell; Bob Muglia, president of the server and tools division. We'll exclude Stephen Elop, the president of the business division who went on to rescue Nokia, as he might have left of his own volition – or of his seeing Ballmer looking for the next excuse.

Last year, I noted Microsoft's stock had been stagnant for almost 10 years. Things haven't improved since then:

In the past 12 months, Microsoft's stock has fallen by 11% while the Nasdaq climbed 25%, Google 7%, and Apple 44%.

Having run out of ideas and envelopes, is Ballmer spending $8.5bn of Microsoft's $50bn cash, its biggest acquisition so far, as a desperate tentative to keep the company, or himself, in the game?

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Microsoft, Skype Deal Could Exploit Synergies with Nokia, Enterprise

Microsoft CEO Steve Ballmer is known for his public exuberance, punctuating keynote addresses with the sort of high-decibel verbal fireworks commonly associated with high-school coaches trying to goad a touchdown.
“Developers! Developers! Developers!” is one of his more famous refrains.
As Microsoft headed into the final stages of its acquisition negotiations with VOIP (voice over IP) and video-conferencing provider Skype, Ballmer’s shout to any Microsoft executives reluctant to embrace the deal might have been: “Synergy! Synergy! Synergy!”
Microsoft is paying a lot for Skype: $8.5 billion. In return for that hefty chunk of change, it will become a business division within Microsoft, headed by Skype’s current CEO Tony Bates. Skype in its new form will support Microsoft products, such as Windows Phone and Xbox Kinect, and integrate across the breadth of Microsoft’s already-extensive portfolio—including the Lync unified-communications platform. 
But that’s not necessarily enough to justify the biggest-ever payout in Microsoft’s history. According to some analysts, the secret sauce of the Skype deal—so to speak—is its potential to bolster Microsoft’s recent partnerships with other companies, as well as its relationship to the enterprise.
“Of [Skype’s] 633 million users, fewer than 8 million are paying users. No matter. What is important is that many of these users would love to make free calls on a mobile phone,” Mike Gualtieri, an analyst with Forrester, wrote in a May 11 corporate blog posting. “Microsoft’s plan to acquire Skype fits in perfectly with its recent partnership with Nokia because both offer incredible reach.”
In other words, Skype could allow Microsoft to boost its competitiveness in the mobile realm against both Apple’s iPhone and the growing family of Google Android devices. “There is no stopping Apple when it comes to mobile and cultural dominance,” he wrote. “But Microsoft could displace Google as the alternative based on the great UX provided by Windows Phone 7, the Nokia partnership and the Skype deal.” 
Whether or not that takes place—despite some analyst assertions that Windows Phone will increasingly dominate the market, Microsoft’s share of smartphones reportedly remains low—the Skype deal could allow Microsoft to maintain its grip on a segment very near and dear to its heart, or at least its bottom line: the enterprise.
That is, if Microsoft manages to swallow Skype without too much indigestion, according to a May 11 blog post by Yankee Group analyst Emily Green: “Two of the many reasons these things fail after the photo-op: a) they buy something sizzling hot, hoping to reinvigorate their own less dynamic offerings and culture—but end up suffocating the entrepreneurial spirit in the acquired firm that made it sexy in the first place. Or, b) they buy something that’s only available because it’s on the ropes.”
That being said, Green views the Skype-Microsoft deal as capable of sidestepping those pitfalls, if only because supple, lightweight VOIP and video-conferencing assets can serve Microsoft’s designs on the enterprise.
Specifically, as those enterprises shed physical infrastructure, “their leaders have to ask some very tough questions about investing in conventional hard-wired telecommunications infrastructure.” That, in combination with employees’ seemingly unstoppable desire to bring consumer software into the enterprise, could create an opportunity for Microsoft to “tightly weave Skype’s functionality into its corporate offerings” in ways that meet the approval of executives and IT administrators. In turn, that could give Redmond the opening it needs to “maintain relevance with the new breed of enterprises being born in this century.”
However, Green concedes that earning back the enormous costs associated with the acquisition “is another story.”
Skype found itself an acquisition target in 2005, when eBay agreed to pay $2.6 billion in cash and stock for the then two-year-old company. Four years later, a team of private investors—including Silver Lake Partners and Andreessen Horowitz—took it off the auction Website’s hands for $1.9 billion in cash. Skype had reportedly been raising money for an IPO, but that offering was delayed after the company appointed Bates to the CEO role in October.
For that substantial bump-up in cash, Microsoft is purchasing one of the Web’s most recognizable consumer brands—albeit one that’s faced increased competition from Google and others in recent quarters.
But one of Skype’s private investors took to the blogosphere to discount that competition as a threat. In a May 10 posting on his personal blog, Andreessen Horowitz co-founder and partner Ben Horowitz suggested that Google’s attempt to market a similar VOIP offering had failed to stop Skype’s momentum: “What was the result of this effort? … Skype new users and usage growth has accelerated since Google’s launch.”
Apple’s Facetime, he added, also failed to blunt Skype’s momentum: “How did that impact Skype’s use on the iPhone? 50 million users have downloaded Skype’s iPhone product since the release of Apple’s FaceTime.”
If you believe Horowitz’s assertions, then Microsoft managed to sidestep the potential acquisition dangers outlined by Green. But how well the company will integrate its newest property—and create synergy with its partners—remains the question of the hour. 

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Skype Fixes Android App Vulnerability

Skype has fixed the privacy vulnerability its Android application that allowed malicious apps to harvest user data.

The vulnerability has been addressed in the latest Skype for Android, Version 1.0.0.983, and the user data has been properly secured on the mobile device, Adrian Asher, chief information security officer at Skype, wrote on the Skype blog on April 20. The problem did not exist for Verizon customers.

Skype for Android was storing names, dates of birth, location information, account balances, phone numbers, email addresses and other biographic details in a nonencrypted and easily accessible file on the mobile device, Justin Case, an amateur Android developer, wrote on the Android Police blog on April 15. Any rogue app could have harvested the personal data as well as old instant messages from insecure database files, according to Case.

Android by default sandboxes applications so that data from one app can’t be accessed by another. In this case, Skype overwrote the default by assigning incorrect file-level permissions, Case said. The data-collecting app Case developed to demonstrate the vulnerability did not require any unusual permissions and worked on non-jailbroken Android devices.

“We have had no reported examples of any third-party malicious application misusing information from the Skype directory on Android devices,” Asher said.

Case confirmed that the updated version closed the security hole and that his sample rogue app no longer can access the information stored in the database, David Ruddock posted on the Android Police blog. Skype changed the permissions of the databases where the data was stored so that only the Skype app can access the information, Ruddock said.

Case noted that the database files were unencrypted in his original analysis. Skype did not respond to eWEEK’s requests for whether the data is encrypted in the new version.

Case originally discovered the issue in the beta version of Skype Video that had been released last week. The fix will be addressed when Skype launches the official version.

In addition to the security fix, Skype added the ability to make VOIP (voice over IP) calls over 3G data connections to the app, even for calls in the United States. The 3G calling feature in the app will not be supported for Android phones over the Verizon Wireless network because Verizon already allows 3G Skype calls, thanks to an exclusive partner agreement signed in 2010.

The Android app previously allowed users to only send instant messages or place calls using the phone’s existing service or over WiFi. With this new version, users can call anyone without using up any minutes on their calling plan because the calls are carried over the mobile data plan. Bypassing the mobile carrier is not entirely free, as users are still subject to Skype fees.

Major carriers have opposed the practice in the past, and only Verizon customers had Skype’s VOIP capability up until now. Even if users aren’t interested in 3G calls, they should upgrade just for the security fix.

Asher reminded users to download the app only from Skype or the official Android Market links to avoid malicious apps.

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Microsoft pays $US8.5b for Skype

Microsoft Corp plans to buy Internet phone service Skype for $U8.5 billion ($7.9 billion) in its biggest-ever acquisition, placing a rich bet on mobile and the Internet to try to best rivals such as Google.

In a deal that took a month from offer to signing, the software company outbid Google and Facebook, which sources said offered to partner or buy Skype for $US3 billion to $US4 billion.

Microsoft's interest in the money-losing, but popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users on average each month and has gained favor among small business users.

But investors expressed skepticism over the deal, sending Microsoft shares down 1.4 per cent to $US25.46. If those losses hold, the software giant's market value - already exceeded by Apple last year - will slip behind General Electric's and begin to approach IBM's.

Led by private equity firm Silver Lake, eBay Inc and other investors including the Canada Pension Plan Investment Board and Andreessen Horowitz, would make $US5 billion, or three times their investment, a source familiar with the deal said.

Microsoft is putting more energy and resources into mobile and the Internet as the personal computer business underpinning its Windows and Office franchise appears to be under threat.

The Luxembourg-based company, which allows people to make calls at no charge, but has also developed premium services, would give Microsoft a foothold in the video-conferencing market as businesses shift to cheaper ways of communicating.

Skype delayed plans for an IPO that was expected to value the company at more than $US3 billion. It looked tie-ups with Facebook and Google. Such a deal was expected to value Skype at $US3 billion to $US4 billion.

"It doesn't make sense at all as a financial investment," said Forrester Research analyst Andrew Bartels. "There's no way Microsoft is going to generate enough revenue and profit from Skype to compensate."

A mobile presence

Skype could be combined with Microsoft software such as Outlook to appeal to corporate users, while the voice and video communications could link to Microsoft's Xbox live gaming.

Skype also would offer Microsoft another route to develop its mobile presence, an area it has already put more energy and resources into as PC usage comes under threat.
Skype would become a new business division within Microsoft with Skype CEO Tony Bates in charge and reporting to Ballmer.

"Tony didn't look for it. The ownership group, led by Silver Lake, didn't look for it. We just decided (it was) something that we thought made sense for us," a jubilant Ballmer told reporters.

The sum would not stretch Microsoft. It would bankroll the deal with cash sitting overseas, which would be taxed if Microsoft brought it home. But others said the price was high.

"In this atmosphere of Internet Bubble 2.0, picking up an unprofitable online company for roughly 10 times sales probably seems downright cheap," said Shanghai-based Michael Clendenin, managing director of consulting firm RedTech Advisors.

"But if you consider (it) was just valued at about $US2.5 billion 18 months ago when a chunk was sold off, then $US8.5 billion seems generous and means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy," he said.

Skype, which was formed in 2003. EBay Inc bought it in 2005 for $US3.1 billion. Last year, it lost $7 million, according to data in its initial public offering filing.

In 2009, eBay sold a majority stake in Skype for $US1.9 billion in cash and a $US125 million note. EBay retained about a third.

Ballmer said his company did not use Wall Street advisers on the deal, approaching the owners directly. Goldman Sachs and JPMorgan advised Skype.

The deal, the biggest in technology so far in 2011, capped the strongest start to deal-making since 2000, according to Thomson Reuters data.

"I wish they had not done it," said Whitney Tilson, founder and a managing partner of T2 Partners LLC, which owns Microsoft shares. "Everybody I know uses it and I am glad Microsoft owns it. They just probably paid too much for it."

"We aren't big enough to have a big say. But I am sure that everybody else -- the bigger shareholders -- are going to be asking Microsoft, 'why did you this?'" 

Biggest deal

The acquisition is Microsoft's largest, surpassing the purchase of AQuantive Inc for about $US6 billion in 2007.

"This could give Microsoft a much-needed kick-start" in telecommunications, Paolo Pescatore, an analyst at CCS Insight in London, said. In voice services, "Skype has certainly set the benchmark and gained a lot of traction".

The purchase is likely to divert Skype from a plan that it announced last year - to sell $US100 million of shares in an initial public offering. The company has struggled to convert users of its free PC-to-PC phone services into paying customers.

Skype reported about $US775 million in debt, along with a revolving credit line of $US30 million, in a filing in April.

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End of Windows Live Messenger: Microsoft Replacing Live Messenger With Skype

End of Windows Live Messenger: Microsoft Replacing Live Messenger With Skype

In 2011 the Redmond based software giant Microsoft acquired Skype Communications for US$8.5 billion, later we have seen several ups and downs, along with compliment and criticism of this acquirement. But we have to remember that, it is Microsoft Corporation, who always have done the very best to make its product successful. In case of Skype the same ting happened. Microsoft announced Tuesday that it is retiring Windows Live Messenger & chat tool and replace it with Skype's messaging tool. Microsoft said Windows Live Messenger (WLM) would be turned off by March 2013 worldwide, with the exception of China. This move will allow consumers to use Skype's features such as chat on all platforms including iPad and Android tablets; send instant messages; make video calls; share their screen; join a group chat; and call contacts on their mobile or land lines. This announcement from Microsoft is made in an effort to make Skype the company's main instant messaging software. It reflects the firm's determination to focus its efforts on Skype. 

For the information of VOGH readers, WLM launched in 1999 when it was known as MSN Messenger. According to survey MSN had more than 330 million active users world wide. According to internet analysis firm Comscore, Windows Live Messenger (WLM) still had more than double the number of Skype's instant messenger facility at the start of this year in the US, and was second only in popularity to Yahoo Messenger. But the report suggested WLM's US audience had fallen to 8.3 million unique users, representing a 48% drop year-on-year. By contrast, the number of people using Skype to instant message each other grew over the period. Microsoft highlighted the fact that WLM was still more popular than Yahoo's product in most other territories, but nevertheless decided to call time on the service. To ease the changeover, Microsoft is offering a tool to migrate WLM messenger contacts over. In order to transition over to Skype, just download the latest version, then select the option to sign in with your Microsoft account on the sign in screen. You will then be asked if you’re already using Skype or are a new user. If you use Skype and Messenger already, you can merge your Skype and Messenger account into your Microsoft account. Skype says it will assist users over the coming months to smoothly transition over from Windows Live Messenger. The move is nothing too surprising — it seemed obvious that Microsoft wanted to take advantage of its acquisition of the popular IM and video chat client. So far, it looks like Microsoft is on the right track to do that.

For detailed information about this story Click Here

-Source (Skype, BBC)

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Security flaw in Skype for Mac fixed

A security flaw in Skype for Mac that could enable a user to gain remote control of a Mac computer running the software has been fixed, says Skype, but users should make sure they have the latest version to ensure total protection.

Attention all Mac owners who use Skype. A flaw has been identified in Skype 5 that enables an attacker to gain remote control of a Mac computer running the software.

Gordon Maddern, a member of a group of ethical hackers based in Australia that goes by the name of Pure Hacking, wrote in a blog post on Friday that he had identified the security flaw last month. “The long and the short of it is that an attacker needs only to send a victim a message and they can gain remote control of the victim’s Mac,” Maddern said.

Describing the flaw as “extremely wormable and dangerous,” Maddern contacted Skype to inform them of the issue and heard nothing back – until today. A short time after his post appeared on Pure Hacking’s blog, Skype posted a response on its own website in order to reassure users.

Adrian Asher, Skype‘s chief information security officer, confirmed that the company was indeed contacted by Maddern last month. Asher explained in the post that the issue was “related to a situation when a malicious contact would send a specifically crafted message that could cause Skype for Mac to crash. Note, this message would have to come from someone already in your Skype Contact List, as Skype’s default privacy settings will not let you receive messages from people that you have not already authorized.”

In the post, Asher claims that they were already working on a fix when they heard from Pure Hacking, and as a result the Luxembourg-based company issued a hotfix (Skype for Mac version 5.1.0.922) on April 14. This update, however, was not pushed to Skype users “as there were no reports of this vulnerability being exploited in the wild.”

Asher goes on to announce that a new update, which will include the hotfix along with a number of other bug fixes, will be sent out next week. This update, however, will prompt users to install it. Asher’s post ends by recommending that users make sure they are running the latest version of Skype (with the April 14 fix). Mac users can check now by clicking here. Skype users with Windows and Linux are not susceptible to the vulnerability.

Founded in 2003, the company’s hugely popular VoIP application can have around 23 million users logged in and chatting at any one time. Recent reports have suggested that the company is in talks with both Google and Facebook regarding a possible joint venture or acquisition.

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Skype is Still Vulnerable

 

An Armenian hacker is claiming that Skype has failed to learn from prior security lessons, falling victim to a cross-site scripting (XSS) vulnerability similar to one it patched in May, which would allow users to redirect victims to unwanted websites or run arbitrary code.  The May vulnerability allowed users to fool the Mac client of Skype into running arbitrary code as the client didn't check, or sanitise, instant messages to ensure they were free of malicious code.

While Skype issued a low-priority patch at the time, a 28-year-old Armenian-based security engineer, Levent "noptrix" Kayan, claimed on Wednesday night that a similar XSS vulnerability existed elsewhere in Skype's software. He said that the failure to sanitise certain user information or the output rendered in Skype clients could still allow code to be executed.

In particular, Kayan claimed that he could see remote users' session information, which he said a malicious user could utilise to masquerade as the remote user and make calls on their account. He also said it could be used to take advantage of other holes, possibly allowing full control over the PC. Both of the latest versions of Windows and Mac clients are affected.

HE told that "An attacker would need to [submit] malicious code. The victim doesn't have to do anything. He will be attacked, when he just logs into his account."

Skype said the vulnerability was considered a minor issue and that it had developed a fix for it which would be deployed next week.

Skype's head of information security, Adrian Asher, said that in order to exploit this, a person would have to be a validated contact of yours and one of the most frequent people you are in contact with and was therefore very unlikely to cause any issues in the real world. Nevertheless, he said the vulnerability shouldn't have existed and it would be fixed.

Additionally, Skype said that the session information that Kayan had been able to access was in relation to the web session IDs and not Skype IDs, suggesting that the attacker couldn't make calls using the exploit. It did, however, concede that it was possible for a victim's contacts to redirect them to any website using the web browser built into the Skype client, but stressed that only validated contacts would be able to do so. In the meantime, it said users should not authorise people they do not know and/or do not want to talk to.

HackLabs director, Chris Gatford, said that it was common to come across these sorts of vulnerabilities in the work penetration testing of client systems his company does.

"I would suggest that 80 per cent, perhaps even 90 per cent of the time, cross-site scripting vulnerabilities are present," he said.

Gatford mentioned the previous XSS vulnerability in the Skype client and thought that it was surprising that Skype had not patched all of its input validation problems when it was previously brought to its attention. "This would be a simple fix for them. To be honest, I'm kind of surprised they didn't learn their lesson the first time and extend the fix system-wide then."

-News Source (ZDNet)

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Skype 5.3 Client Released for Apple Mac OS X Lion

(VoIP) outfit Skype has updated its client software for Apple Mac users to version 5.3, which brings support for Mac OS X 10.7 Lion. The latest version of the internet chat software provides a number of fixes and improvements to the interface according to Skype. It also includes support for high definition (HD) video calls, provided you have an HD webcam.

On its blog Skype said 

"On the heels of our recent update to Skype 5.2 for Mac OS X, we are pleased to announce that we are making even more improvements to our Mac client with the release of Skype 5.3 for Mac OS X."

It's been just over a month since Skype launched version 5.2. If you haven't got Mac OS X Lion, the latest version of Apple's operating system, then Skype 5.3 is compatible with older versions going back to Leopard.

Other features of the software include group video calling and group screen sharing, for an extra cost. Skype recently made a deal with Microsoft and Facebook has integrated Skype into its social networking web site for video chat. Meanwhile, Windows users are up to Skype client version 5.5, which includes instant messaging to Facebook friends.

To see the Skype blog statement click here
To download Skype for MAC click Here

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Skype Vulnerability Reveals User IP Addresses

Skype Vulnerability Reveals User IP Addresses

If you are a Skype user then both your IP address and location can be determined or in other word can easily be revealed. According to a blog post, a modified version of the Skype VoIP software can be used to easily find out the IP address of any valid Skype user. No contact has to be made with the user in order to get the information. This IP could then be used to find out other personal details about the user, such as their location or even their employer. The process only works if the other user is online. The only method of protecting against this is to log off of Skype when you're not using it, or ot use a virtual private network to hide the IP address. The IP address doesn't give up a person's name or other specific information, but it does provide information on the country, and in some cases city, of origin. Last week, someone posted a an exploit of that vulnerability within the Skype network on Pastebin, providing details of how to download a modified or patched version of Skype 5.5 that would allow the exploit to be run.  "Claudius," a community manager on the Skype forums, said that Microsoft was aware of the issue. "Hello, yes, our security experts are aware of it and looking into it already," he posted Monday morning.

Microsoft said - "We are investigating reports of a new tool that allegedly captures a Skype user's last known IP address, a Skype representative said in an emailed statement. "This is an ongoing, industry-wide issue faced by all peer-to-peer software companies. We are committed to the safety and security of our customers and we are takings measures to help protect them." 

 

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Skype 5.5 (With Deeper Facebook Integration)

Skype has released the latest update to its online calling software for Windows, offering more options for Facebook users.

Officially out of beta since Wednesday, the latest Skype 5.5 for Windows lets you check which of your Facebook friends are online and available to chat, all without having to leave Skype. Simply clicking on the View menu in the Skype software and then choosing Facebook Friends shows you the list.

By clicking on and then closing the Skype Home screen, you can also update your Facebook status and scroll down to view your entire Facebook wall.

Beyond the Facebook integration, Skype says that its latest version offers improved controls for video and group calls for Windows, better call reliability, and various design changes in the interface.

Once it was installed, you will be able to use Skype 5.5 to view online Facebook friends, access wall, and post status updates just as easily as one could in Facebook.

To Download Skype 5.5 click Here

For More information about Skype 5.5 click Here

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Skype 4.0 for Linux Codenamed 'Four Rooms for Improvement' Released

Skype 4.0 for Linux Codenamed 'Four Rooms for Improvement' Released

After a long wait finally Skype has released version 4.0 for Linux codenamed 'Four Rooms for Improvement'. This is the first major update on Linux since Skype 2.2 Beta was made available in April 2011. With this release, Skype have finally filled the gap with other desktop clients and now making many of the latest Skype features, as well as a lot of UI improvements, available for the penguin lovers.

Major Changes:- 

• A new Conversations View where users can easily track all of their chats in a unified window. Those users who prefer the old view can disable this in the Chat options

• A brand new Call View

• Call quality has never been better through this reease skype made in improving audio quality

• Improving video call quality and have also extended support for more cameras.  

Improvements and Fixes :-

• Improved chat synchronization

• New presence and emoticon icons

• The ability to store and view phone numbers in a Skype contact's profile

• Much lower chance Skype for Linux will crash or freeze

• Chat history loading is now much faster

• Support for two new languages: Czech (flag:cz) and Norwegian (flag:no)

To Download Skype 4.0 for Linux Click Here

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Reverse Engineered Source Code of Skype Allegedly Stolen & Exposed

Reverse Engineered Source Code of Skype Allegedly Stolen & Exposed 

After VMWare & Norton's Symantec now another big fish -Skype get caught among the list of those whose source code has been allegedly stolen. An Anonymous affiliated hacker named "57UN" also known as 'Stun' claims to have stolen the source code which he made public. From this leak several fact come in front, according to the hacker the Federal Authorities uses skype for surveillance, in his twitter the hacker said - "Oh and the FBI uses #Skype as a surveillance tool?! #Lulz?! Privacy my ass! Wake up people!..." He added "#Skype & privacy?! Yeah! Did you know that #Microsoft works with each and every government, for instance in #Tunisia!..." 

In his release on Pastebay Stun said- 

"AFTER MICROSOFT ACQUIRING SKYPE FOR 8.5 BILLION DOLLARS AND PROCEEDING TO ADD BACK DOORS FOR GOVERNMENT TO THE PROGRAM, THE SOFTWARE HAS BEEN HACKED AND IT'S SOURCE CODE RELEASED

Skype1.4_binaries

http://thepiratebay.se/torrent/6442887

SkypeKit_sdk+runtimes_370_412.zip

skypekit binaries for Windows and x86_Linux + SDK

http://thepiratebay.se/torrent/7190651/

skype55_59_deobfuscated_binaries (Windows)

http://thepiratebay.se/torrent/7238404/

http://twitter.com/57UN

#Anonymous #Antisec #PoliceState #SecurityState #OpenSource ..."

However, experts state that the source code published by the hacker is actually the one leaked some time ago by a researcher who reverse engineered the Windows binaries. According to security researcher Janne Ahlberg “I managed to get a copy of the file ‘skype55_59_deobfuscated’ from May. It is not Skype source code, but a reverse engineered version of the Windows binaries. The tool used in reverse engineering seems to be IDA disassembler/debugger” 

So far 3 torrent files being released which include a reversed engineered copy of the skype protocol, the source development kit(sdk) and needed runtime and de-obfuscated, unpacked Skype 5.5 and 5.9 binaries for Windows. 

-Source (Softpedia) 

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Researcher are saying: Skype for Mac has 'dangerous' vulnerability

Skype's Mac client has a serious zero-day vulnerability that the company is yet to fix, a security researcher has said.
Writing on the blog of security firm Pure Hacking, researcher Gordon Maddern said on Friday that the vulnerability means "an attacker needs only to send a victim a message [through Skype] and they can gain remote control of the victim's Mac". He added that the exploit was "extremely wormable and dangerous".
According to Maddern, he notified the VoIP company about the vulnerability more than a month ago, only to get a standard response reading: "Thank you for showing an interest in Skype security. We are aware of this issue and will be addressing it in the next hotfix". A fix has still not been released in the intervening period, he said.
"Pure Hacking won't give specifics on how to perform this attack until a patch from Skype is released," Maddern wrote. "However, we will give a full disclosure after Skype takes action or a reasonable responsible disclosure time."
According to Maddern, Skype's Windows and Linux clients are not vulnerable to the attack.
UPDATE (5:13pm): Skype has just sent ZDNet UK a statement promising a fix next week. The statement reads: "We are aware of this and will release a fix early next week to resolve the issue. We take our users privacy very seriously and are working quickly to protect Skype users from this vulnerability."

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Microsoft Planned To Release Skype Application For Windows Mobile

Microsoft Planned To Release Skype Application For Windows Mobile

Microsoft Corporation has planned to release Skype video-calling application for its Windows Phone. The application will be avalable on April this year. Terry Myerson, head of the Redmond, Washington-based company’s mobile business, said in an interview last week. It will unveil the software today at the Mobile World Congress in Barcelona, Spain, and release a version for beta testers. Terry Myerson, head of the Redmond, Washington-based company’s mobile business, said in an interview last week. It will unveil the software today at the Mobile World Congress in Barcelona, Spain, and release a version for beta testers.
Microsoft bought Skype to gain customers and enhance its existing products -- such as Windows phones and Xbox game consoles, along with Internet-calling and videoconferencing software. Skype customers made more than 300 billion minutes of calls last year, Microsoft Chief Executive Officer Steve Ballmer said in January. The service, which handles both voice and video calls, is the top provider of international calling. Windows Phone has just 2 percent of the mobile operating- system market, and lags behind Apple Inc. and Google Inc. in providing apps. Both those rivals already have Skype apps.
Microsoft bought Skype to gain customers and enhance its existing products -- such as Windows phones and Xbox game consoles, along with Internet-calling and videoconferencing software. Skype customers made more than 300 billion minutes of calls last year, Microsoft Chief Executive Officer Steve Ballmer said in January. The service, which handles both voice and video calls, is the top provider of international calling.
Windows Phone has just 2 percent of the mobile operating- system market, and lags behind Apple Inc. and Google Inc. in providing apps. Both those rivals already have Skype apps.

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