Microsoft Corp. on Monday said it will buy Internet communications company Skype for 8.5 billion U.S. dollars in cash, a bold move for the software giant to explore new business opportunities.
"Skype is a phenomenal service that is loved by millions of people around the world," Microsoft CEO Steve Ballmer said in a statement.
"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," he added.
Microsoft said it has agreed to buy Skype from the investor group led by Silver Lake, and the deal has been approved by the boards of directors of both companies.
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 Ballmer.
The Skype deal ranks one of the biggest purchase in the 36-year history of Microsoft, which is struggling to compete in the fields of Internet and mobile phones beyond its dominance on personal computer software market.
Founded in 2003 and based in Luxembourg, Skype offers a software application that allows users to make free or cheap phone calls and chats over the Internet with additional features including instant messaging and video conferencing.
Numbers showed that Skype's 170 million connected users made over 207 billion minutes of voice and video conversations in 2010.
Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009.
In a press release announcing the acquisition, Microsoft noted that the deal will increase the accessibility of real-time video and voice communications, generating significant new business and revenue opportunities, and enhancing its existing offerings of real-time communications products and services.
Microsoft said Skype will support its devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and it will continue to invest in and support Skype clients on non-Microsoft platforms.
The acquisition is expected to obtain all required regulatory clearances within this calendar year, Microsoft said.
