Microsoft confirms $8.5 billion Skype deal

Skype will now be integrated into a variety of Microsoft offerings, including Kinect and Windows Phone 7, the Redmond giant confirmed.

Users of the VoIP (Voice over Internet Protocol) service will as well be connected with Lync, Outlook and Xbox Live. Details of how these connections will be made, and at what cost to the user, were not forthcoming.

"At the same time we will create the future of real-time communications so people can easily stay connected to family, friends, customers and colleagues anywhere in the world," said Steve Ballmer, Microsoft's chief executive.

"We are excited about Skype's long-term future with Microsoft, at this stage poised to become one of the world's most dynamic and comprehensive communications platforms," said Egon Durban, managing director of Silver Lake.

"Skype is arguably the most successful real-time social communication platform on the planet, and its $8 billion price tag means that only companies just as Microsoft have any chance of acquiring it," said Ovum principal analyst Richard Edwards.

Good fit for Microsoft's business model?

"However is it a good fit for Microsoft's business model? Answer: Yes. It's popular, it runs on Windows PCs, and later this year it will be available on Windows Phone 7. Like as not more importantly for the rest of us, Skype as well runs on other computers, just as Mac and Linux, and mobile phones too, such iPhone and Android-based devices."