Microsoft snaps up Skype for $8.5 billion

Microsoft has acquired Skype for a cool $8.5 billion in cash.

According to Redmond, the platform will support Microsoft devices like Xbox, Kinect and WP7. Meanwhile, Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. 

As expected, Microsoft has also pledged to continue to support Skype clients on non-MS platforms.

The freshly acquired company will be become a new business division within Microsoft, with Skype CEO Tony Bates will assuming the title of president of the Microsoft Skype Division, reporting directly to Steve Ballmer.

Some analysts believe the lucrative deal could help Microsoft attract Web users and narrow Google’s lead in online advertising.

However, Kunal Bajaj, head of telecommunications consulting firm Analysys Mason India Pvt, questioned whether the acquisition would help Redmond catch up with Mountain View in any meaningful way.

“Microsoft has a lot of areas in its overall Internet business that it could be working on, and whether the acquisition of Skype is the key silver bullet that fixes all of that remains to be seen,” Bajaj told Bloomberg.

“People go to Skype to make phone calls, and there isn’t much else in social networking, instant-messaging and status updates and things like that.” 

Founded in 2003, Skype was snapped up by eBay in September 2005, and then purchased by an investment group led by Silver Lake in November 2009.