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Microsoft Acquires Skype For $8.5 Billion

Microsoft has announced that it will be buying VoIP giant Skype for $8.5 billion in cash, its biggest acquisition yet, in a bid to position itself as a major player in the increasingly important world of unified communications.

The company issued a press release earlier today (opens in new tab), saying that both boards of directors had approved the deal, which doesn't involve any stocks or shares and is a significant premium over what many analysts expected Skype to IPO for.

The software giant wants to leverage the reach of Skype's global network to enhance its existing portfolio of real-time communications products and services, which has yet to become as compelling as Office, Internet Explorer or Windows.

Microsoft has several products in the real-time communications realm with Lync, Outlook, Messenger, Hotmail and Xbox LIVE being the main products in its portfolio; Skype will join them as a new division called Microsoft Skype, headed by the current Skype CEO, Tony Bates.

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

The press release mentions that Skype has 170 million connected users with around 28 to 30 million connected at any given time. However, this is far short of the estimated 700 million registered users that the VoIP company is believed to have.

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.