UPDATE: It’s official! Microsoft bought Skype for $8.5 billion. Plans include integrating it into Xbox, Kinect and Windows Phone.
Earlier this week, it was Google and Facebook who were dueling to buy VoIP company Skype. But it was Microsoft who came out of nowhere that’s closed to inking a deal to acquire Skype for more than $8 billion. The deal could be announced as early as tomorrow and it would be Microsoft’s biggest acquisition in three decades.
Microsoft Chief Executive Steve Ballmer, though, sees the Internet as an essential battleground for Microsoft, a company that still makes the vast bulk of its profits from Windows and Office software systems. This move is expected to strengthen Microsoft’s various online communication platforms, from Windows Live Messenger to Microsoft Lync. Skype would also play a role in helping Windows Phone 7 catch up with Apple and Google in the mobile-phone market.
Skype was founded in 2003 by p2p-software Kazaa creators Niklas Zennstrom and Janus Friis. In 2005, Ebay purchased Skype for $2.6 billion in cash but sold a majority to private investors in 2009. Now, Microsoft will be the owner of this online telephony giant and its low profits, debts, legal mess and all.