Morning Coffee May 10 2011

Microsoft Buys Skype for $8.5 Billion

By joseph walker

Microsoft has purchased Internet voice and video communications service Skype for $8.5 billion, the company announced today.

Only two years ago, Andreessen Horowitz bought the beleaguered eBay unit for $2 billion in a move that was criticized by the investment and telecomm communities.

In a lengthy post on AllThingsD, Ben Horowitz of Andreessen Horowitz defends the initial eBay purchase, explains how the business came to thrive and tips his hat to Microsoft on a smart purchase.

Yesterday, when rumors of the deal were initially reported, some analysts suggested to the Times that Microsoft made a move for Skype to help stave off Google from beating out Facebook -- which might not have the cash to pull the deal off -- in the acquisition.

Last week, Google and Facebook were reported to be the two contenders to acquire Skype, at a valuation of up to $4 billion. How the price has doubled in a week is anyone's guess.

EBay bought the company in 2005 for $2.5 billion in 2005 before selling it to Andreessen Horowitz two years later and writing off a $1.4 billion loss on the investment.

It's far from clear that Skype is a valuable property on its own. But for a company like Microsoft that has cash to burn and services like Xbox and search engine Bing to incorporate the service into, it just might work. (WSJ)

Cisco Does More With Less (Bloomberg)

In its continued streamlining of its management structure, Cisco has brought on Juniper executive David Yen to head its server access and virtualization technology group. Yen will replace a troika of executives who formerly ran the division.

Seven Ways to Keep Your Resume out of the Trash (FINS)

Is your resume literally in another dimension where no hiring managers and recruiters can read it? Or does it just feel that way?

Texas Talent Acquiring Techniques (Austin American-Statesman)

Texas lawmakers are attempting to rein in what they see as Governor Rick Perry's free hand in awarding cash and incentives to lure tech companies to the state. The governor recently awarded $2.8 million to eBay to expand operations there, promising to create 1,050 jobs.

LinkedIn Values Itself At $3 Billion (SF Chronicle)

With 102 million users, but just $2.08 million in net income in the first quarter of 2011, LinkedIn says it will sell IPO shares for up to $35, a valuation of over $3 billion. Rumor has it that the professional networking site could list itself on the New York Stock Exchange as soon as this month.

Related: LinkedIn to Hire Following IPO | Hoffman Stake in LinkedIn | New Web Startups Minting Millionaires

Oracle's Ellison Among Highest Paid CEOs (FINS)

Not just in technology. Only one CEO was paid more than Ellison in 2010.

Hallelujah, Tech Is California's Savior...Maybe (WSJ)

California's economy added 90,600 jobs in the first three months of 2011 -- more than it added in all of 2010. Much of the boom is coming from tech hiring in Northern California, and some economists say if the hiring pace remains constant, the state could even lift itself out of its dire budget situation.

NYC Tech Comes Into Its Own (Bloomberg)

New York still trails Silicon Valley and Boston in venture capital funds, but the rate of investment in its startups is growing faster than either. One of New York's competitive advantages: disaffected finance folks looking for new work.

College Graduates on the Job Market (CNet)

Tech grads are finding the job market improving, but just how desirable they are to employers depends on where they are located in the country.

Indianapolis Incentives Growth (IBJ)

Slingshot SEO, an Indianapolis startup says it will add 114 more jobs after receiving $1.15 million in tax credits from local economic development officials.

Apple and Google Go to Capitol Hill (The Hill)

Representatives from Apple and Google will prostrate themselves in front of Congress today over revelations that their smartphone software tracked user locations.

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