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article imageMicrosoft to announce $8.5 billion Skype acquisition?

By David Silverberg     May 10, 2011 in Technology
Microsoft is reportedly buying Internet phone company Skype Technologies SA for close to $8.5 billion. It would be Microsoft’s largest acquisition in its history.
Editor's note: The Microsoft acquisition of Skype has been confirmed. Check out our full report here.
Numerous reports, including a late-night Wall Street Journal article, state sources close to Microsoft say the computing giant will announce its acquisition of Skype on Tuesday morning.
The WSJ article writes, "Buying Skype—a service that connects millions of users around the world via Internet-based telephony and video— would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market."
Last week there were reports of other companies courting Skype: Facebook and Google were supposedly interested in the company, but the rumours didn't pan out.
The Skype deal would be a momentous occasion for Microsoft: in the 36-year history of the Bill Gates company, the deal would be the largest acquisition it ever completed. In 2007, Microsoft paid around $6 billion for online advertising firm aQuantive.
Skype has had a tumultuous lifespan. eBay purchased the telephony startup for $2.6 billion in 2005, and then sold it back to the company’s founders, "as well as VC firms Silver Lake Partners and Andreessen Horowitz in a deal that valued the company at $1.9 billion in November 2009," PaidContent writes.
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How would Microsoft integrate Skype into its products? The WSJ article believes Skype - which allows you to make phone calls over the Internet - could be baked into Windows Phone 7 operating systems in order to give Microsoft a much-needed boost in the mobile space.
Some tech observers don't see a holy matrimony between the two companies. TechCrunch's Erik Schonfeld writes, "When you think of Microsoft, you don’t exactly think about voice communications. You think about productivity, and to some extent collaboration (although I find its products to be designed more for solitary use). Skype is not a natural fit. Just like it wasn’t a natural fit for eBay, which bought it and then spun it off."
More about Skype, Microsoft, Telephony, Ebay, Acquisition
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