Microsoft close to buying Skype

A report by the Wall Street Journal, citing "people familiar with the matter," suggests that a deal with the Luxembourg-based company may be announced as early as Tuesday - even though the report as well stated that it "could all in all fall apart." That may be the hope of skeptical Skype fans who fear such a takeover could result in unwanted changes to the popular Internet phone service.

According to the WSJ, such an acquisition would give Microsoft a weightier online presence, with the Internet seen as a key battleground by chief executive Steve Ballmer. Its efforts to make gains in the search engine market with Bing have resulted in some success, even though Google however commands some 65 percent of US searches.

Skype, founded in 2003, allows users to make voice and video calls online and has more than 600 million registered users. It was bought by eBay back in 2005 for $2.6 billion in cash and stock in the hope that it would be popular with buyers and sellers who would use it to discuss potential transactions. It seemed that eBay members preferred to stick with tried and tested methods just as email, and the take-up of Skype within eBay never as a matter of fact happened. Two years ago, eBay sold a 70 percent stake in Skype to a group of innovation investors. It's these people who will probably be getting little sleep tonight, especially if it's not quite a done deal with Microsoft.

The meanwhile

In the meanwhile, we'll wait and watch to see if Microsoft announces news of its biggest ever deal, and if so, how it plans to make use of the hugely popular VoIP (Voice over Internet Protocol) service.