Microsoft to buy Skype for $8.5 billion

by Mindi Sue Sternblitz-Rubenstein | May. 10, 2011

Microsoft Corp plans to buy Internet phone service Skype for $8.5 billion. The Skype deal is the biggest in the 36-year history of the world's largest software company.

With around 663 million users worldwide, Skype, which is based in Luxembourg, is the world's most popular Internet communications service company, and the acquisition is expected to become a big push in Microsoft's online services. It is expected to support several of Microsoft's devices such as Xbox and Kinect, Windows Phone, and connect Skype users with Lync, Outlook, Xbox Live and other communities.

According to the agreement, Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Microsoft CEO Steve Ballmer.

Tags: retail

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