The rumors about Skype's acquisition by Microsoft has turned out to be true with Microsoft announcing that it is buying Skype for $8.5 billion dollars. This makes it the biggest deal in Microsoft’s 36-year history. The acquisition of the Luxembourg - based VoIP company Skype had reportedly attracted interest from Cisco, Facebook and Google as well - actually Facebook was considered a front-runner.

Microsoft said it will integrate Skype's functionalities to its Xbox game console, Outlook email program and Windows Phone 7 and other non-Microsoft platforms. All of these platforms already have other Internet calling options, but the addition of Skype users would be tremendously expanding their horizon, providing Microsoft an edge. Skype CEO Tony Bates is assumed to be the President of the Microsoft Skype Division.

Microsoft chief executive Steve Ballmer said in a statement early Tuesday announcing the purchase,

Skype is a phenomenal service that is loved by millions of people around the world. Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.

Skype has currently about 170 million users all over the globe. Getting their hands on such a service with a huge number of customers will surely provide Microsoft a better foothold in the Internet area where it has not been able to make any notable impact so far.

Source : Yahoo