Microsoft Purchases Skype for $8.5 Billion

Microsoft announced its acquisition of the communications service Skype for $8.5 billion.

The company said that Skype would become a new business division within Microsoft and Skype’s CEO Tony Bates will work under the title of president of the Microsoft Skype Division.

Skype is a program used by millions around to world to make free or low-cost phone calls over the Internet using computers and smartphones.

The purchase of the company could help Microsoft to become more mobile-friendly, as the Windows Phone and Bing search engine both struggle. Now Skype will support Microsoft products such as the Kinect motion controller, Windows Phone, Xbox game console and other Windows devices. Skype clients on non-Microsoft platforms will continue to be supported.

Analysts have said that this move could be just to block Facebook and Google, but it could also hold large profit rewards for Microsoft.

As Douglas McIntyre of 247WallSt.com says, Microsoft’s “real motive for a Skype buyout is likely to be to increase its mobile search engine share, something it has been unable to do so far.”

The deal has been approved by the boards of both companies, but still needs to obtain regulatory approvals.

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