Microsoft is in advanced talks to acquire Skype, which revolutionized telephone calls over the Internet, for $8.5 billion, including the assumption of debt, according to people involved in the negotiations.
A deal is expected to be announced Tuesday morning, these people said, although they cautioned that the talks could still fall apart. A spokesman for Skype declined to comment, and calls to Microsoft were not returned.
The acquisition would be Microsoft’s largest ever and it is the software giant’s effort to gain a foothold in the world of voice and video communications. Microsoft would be able leverage Skype’s more than 600 million registered users into using its other products. For example, it could be connected to Microsoft’s Xbox 360 and Kinect systems, and integrated into the company’s flagship product, Office, as a way for business users to better collaborate.
If the deal holds, it would be an impressive move by Microsoft and shows that they aren't going to sit around and get left behind. I'm interested, however, to see what plans they have to make the move profitable...