Microsoft buying Skype for $8.5 billion

Microsoft is buying Internet voice and video leader Skype for $8.5 billion dollars in a move aimed at boosting its presence in an online arena dominated by Google and Facebook. The purchase of Skype, which reportedly also attracted interest from Cisco, Facebook and Google, is the largest ever by Microsoft and gives it control of one of the few companies whose name has become a verb, as in to "Skype." Analysts were divided over the acquisition, with some saying it was a good strategic move for the US software giant and others saying Microsoft paid too much and would stifle innovation at Skype. Skype, one of the top applications on Apple's iPhone and on smartphones powered by Google's Android software, has some 170 million users who will now be able to "Skype" using Windows-powered phones or even Xbox game consoles. "Skype is a phenomenal service that is loved by millions of people around the world," Microsoft chief executive Steve Ballmer said in a statement early Tuesday announcing the purchase. "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." Microsoft said Skype will become a new business division within Microsoft with Skype