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Microsoft to Buy Skype for $8.5 Billion

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and various Windows devices.

NEW YORK - Microsoft said Tuesday it has agreed to acquire Internet communications firm Skype for $8.5 billion in cash, marking the software giant's biggest acquisition to-date.

Skype, known for Web telephony, is being sold by an investor group that had bought a 70 percent stake in the firm from eBay in 2009.

The acquisition will "increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities," Microsoft said.

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and an array of Windows devices. Microsoft will also connect Skype users with Lync, Outlook, Xbox Live and other communities.

Microsoft said it will continue to invest in and support Skype clients on non-Microsoft platforms.

“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.”

Skype will become a new business division within Microsoft, with Skype CEO Tony Bates assuming the title of president of the Microsoft Skype Division, reporting to Ballmer.

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

Skype has 170 million users and had over 207 billion minutes of voice and video conversations in 2010, according to the firm.

According to the Wall Street Journal, Google and Facebook were among the companies that previously explored an acquisition of or joint venture with Skype.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai