UPDATED: Microsoft confirms $8.5bn Skype deal

Microsoft has confirmed that it will buy Skype for $8.5 billion in cash.

UPDATED: Microsoft confirms $8.5bn Skype deal

According to Microsoft, the acquisition will increase the accessibility of video and voice communications for both consumers and enterprises when it is integrated into the Redmond stable.

In an announcement that goes some way to answer swirling questions over why Microsoft would want to buy Skype – which boasted 170 million connected users and over 207 billion minutes of voice and video conversations last year – Microsoft said it would be putting live communications at the heart of its business.

“Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities,” the company said, adding that it would continue investment and support for Skype clients on non-Microsoft platforms.

However, as readers have commented on this story and Jon Honeyball’s blog, there is a suspicion that at least part of the motivation for the acquisition was to prevent Skype from falling into the hands of rivals.

VoIP specialist Skype had previously been in talks with both Google and Facebook.

Skype has more than 660 million registered users worldwide, even more than Facebook. Yet, despite the enoromous global user-base, Skype remains a loss-making venture.

Auction house eBay bought the company from its founders for $2.6bn in 2005, but the company eventually wrote down Skype’s value by $1.4bn, before selling off a 70% stake to a group of investors in 2009.

The latest deal would include Microsoft taking on nearly $700 million of Skype’s debts.

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