Microsoft buys Skype for $8.5b for Xbox, Windows Phone

Microsoft on Tuesday confirmed rumors and said it would buy Skype for $8.5 billion. The mutually approved deal will see Skype's voice and video chat help out platforms like the Xbox 360 and its Kinect camera as well as Windows Phone. Outlook and Microsoft's corporate communication system Lync would also get help, Microsoft said.
The Windows developer insisted it would still "invest in and support" Skype for non-Microsoft platforms. Skype chief Tony Bates would head up a new group inside Microsoft, the Skype Division, and would talk directly to Microsoft CEO Steve Ballmer.

Government approval for the deal is expected before the end of 2011.

Microsoft's acquisition is its largest to date and has already drawn criticism for the potential impact it could have on voice over IP. Despite its promises, Microsoft would have a financial interest in discouraging support for Android, iOS, and the Mac. It might also prefer to support the Xbox 360 over built-in Skype support in TVs from Panasonic and others.

Posted in: Companies, Internet, Microsoft, Skype