Microsoft buys Skype for $8.5 billion

Pays for the company in cold, hard cash - Microsoft has officially acquired Skype for $8.5 billion, a deal which has been approved by the boards of directors of both Microsoft and Skype.

"Skype is a phenomenal service that is loved by millions of people around the world," said Microsoft CEO Steve Ballmer about the deal.

"Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."

ORIGINAL STORY

Microsoft has all-but sealed a deal to buy internet phone firm Skype, reportedly looking to pay $8 billion for the company.

Skype has been long sought after by many tech companies, with Google, Microsoft and Facebook all rumoured to be interested in buying the service but it seems that it is Ballmer and co. who have reached for the chequebook.

Although the deal is not yet official, the Wall Street Journal is reporting that it could be announced today – as long as negotiations go smoothly.

As part of the deal Microsoft is set to take on Skype's current debt, with the WSJ believing this will mean it will have to pay as much as $8.5 billion for the company.

Biggest ever buy

If the acquisition is successful then it will be the biggest ever for Microsoft, a company which has started to lose traction to the likes of Google.

Skype has been around since 2003 and is was bought by the folks behind eBay, who paid $2.5 billion for the web service back in 2005. It was then bought by private investors - who originally invested in Skype - in 2009 for around $2 billion.

In recent years Skype has found its way on to more and more products, including mobile phones and televisions.