The recent announcement that Microsoft, Corp. is planning to acquire global internet communications company Skype could mean an influx of new employees to Redmond, driving up the housing sales and revenue for the local economy.

Microsoft stated in their announcement of the acquisition that a new division will be formed around Skype technologies, with the current Skype CEO Tony Bates reporting directly to Microsoft CEO Steve Ballmer.

This new division, possibly headquartered at the Microsoft campus in Redmond, could mean more new workers coming to the city.

Neither Skype nor Microsoft would comment on specific details of the acquisition, including how the location of current Skype operations would be affected, because the deal still has to gain approval from government regulators.

Skype employs approximately 1,000 people in locations around the world, including 300 at its largest office in Tallinn, Estonia, where the company was founded.

The acquisition could see many of these positions moved to the area. Jim Roberts, the deputy planning director and economic development manager for the City of Redmond, said many service businesses and restaurants “realize a major portion of their business” comes from Microsoft employees, and that the Redmond economy has a tendency to “grow up and (expand) with the growth of Microsoft.”

BIG BENEFITS

An influx of jobs to the Redmond area could also provide a boost to a housing market that was described by Roberts as “still very slow.”

If Microsoft decides to expand its Redmond campus with the creation of its new Skype division, the Redmond housing market, where the median price in 2009 was $483,100, could see an increase in business.

Roberts stated that in the past, increases in the workforce at Microsoft has “had a very positive effect on the housing market.” Roberts went on to say that the few housing complexes that are being built in Redmond will be home to Microsoft employees.

Businesses also stand to benefit from the Microsoft acquisition if the company decides to expand its local campus.

In an e-mail statement, Christina Henning, senior manager for marketing at Redmond Town Center (RTC), could not release precise figures on how much of their business stems from the software giant and its employees. But she did state that RTC maintains a “great partnership and personal relationship with Microsoft employees and their families,” and is “fortunate to have the organization as a partner.”

Many businesses, including the RTC, have experienced decreased traffic and sales in recent years. An influx of Microsoft employees could help inject revenue into a business market that is just beginning to bounce back from the recent recession.

SEEKING APPROVAL

The acquisition, which cost Microsoft $8.5 billion in cash, will see Skype technologies integrated into current and future Microsoft products, including its massively popular Xbox game console and new versions of Windows Mobile 7, according to Skype’s global communication manager, Brian O’Shaughnessy.

First, however, the acquisition must be approved by regulatory boards both in the European Union, where Skype keeps its corporate headquarters, and the United States; Microsoft hopes to have the process completed by the end of the year.

Precise details on how Skype will be worked into the current working structure of Microsoft will not be decided until the acquisition is much closer to approval.

Taylor Wirtz is a senior at the University of Washington and a contributor to the Redmond Reporter.