Microsoft and Skype announced a definitive agreement today that would see Microsoft purchasing Skype for $8.5 billion in cash from the investor group Silver Lake.
Redmond-based Microsoft will pull Skype’s VoIP video and audio conferencing service into its existing portfolio, supporting its real-time communication tools like Xbox Live, Windows Phone 7, Lync, Outlook, and Kinect.
Skype will become a division within Microsoft, and Tony Bates, the VoIP company’s CEO, will now become president of that division, which will still provide support and continuous updates to existing Skype services.
As readers will recall, Skype had filed for an IPO in 2010. According to TechCrunch, the investors involved had planned to go through with that IPO, except Microsoft offered them a valuation they couldn’t turn down.
That’s because Microsoft was bidding against Skype’s IPO, thereby taking a big future competitor under its roof.
