Most expensive acquisition in the firm's history

Microsoft to buy Skype

Microsoft is close to completing a deal to acquire Skype, beating out other suitors thought to include Google and Facebook.

The Wall Street Journal reported that Microsoft was set to pay between $7 and $8 billion for the cross-platform voice and video chat service. All Things Digital went further to report the deal is "actually done" at $8.5 billion and will be announced on Tuesday.

Skype has been a loss making business but has achieved a good deal of success in gaining traction not just on desktop computers but increasingly on mobile device also. The firm had previously been expected to file for a public offering this year.

eBay bought Skype for $2.6 billion in 2005 only to sell 70 per cent of the firm to private investors four years later.

The $8 billion will also be the largest acquisition Microsoft has ever undertaken and looks set to deliver Microsoft 663 million existing Skype users as well as paving the way for integration of a ready-made voice and video chat service for the firm’s Windows Mobile platform.

The astonishing price tag for an as-yet-unprofitable service is some indication of the high stakes as the tech giants continue to seek economies of scale in emerging computing platforms.

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