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Microsoft buys Skype for $8.5bn

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skype_icon1internet deal

Microsoft is now the proud new owner of internet communication company Skype. The price tag – $8.5 billion.

The aggressive deal is the most costly acquisition by Microsoft in its 36-year history and gives it another foothold in the communication market.

Microsoft recently finalised a partnership with Nokia to integrate the Windows Phone 7 platform on the mobile manufacturer’s handsets from 2012.  

There are more than 660 million Skype users around the world who use the service for free Skype to Skype video and voice calling.

Skype will be installed as a new business division within Microsoft with Skype CEO Tony Bates retaining his position at the helm as president of this new division.

Microsoft already has its Hotmail and Messenger chat business and it is likely Skype will be integrated into these existing products.

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

“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.”

Done deal: Microsoft CEO Steve Ballmer (left) and Skype CEO Tony Bates

A recent success story for Microsoft has been the Kinect motion controller for the Xbox 360 and it’s a sure bet users will be seeing Skype on that platform.

The ink still hasn’t dried on the Microsoft deal with Nokia and the Skype acquisition is sure to play a part in that part of the business.

So from the smartphone, to the computer in the office and the Xbox 360 console in the lounge room Skype is sure to become a prominent part of the offering in all three areas.

“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Skype CEO Tony Bates.

“Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

The purchase of Skype is also another way to become even more relevant on the internet.

Microsoft has already put a lot of money and energy towards its own search engine Bing in an attempt to challenge Google,

Skype has had a colourful history since it was launched in 2003 by Niklas Zennstrom and Janus Friis.

eBay bought the company for $2.6 billion in 2005 and it was thought the service could used by members of the auction site to communicate about listings and items for sale.

The initiative failed and eBay sold off a 70 per cent stake of Skype in 2009 to technology investors.