Microsoft to buy Skype for $8.5bn

Microsoft will buy Skype for $8.5bn in cash, reports the Wall Street Journal.

Skype will become a new business division within Microsoft, and Skype Chief Executive Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Mr. Ballmer.

Buying Skype--a service that links users via Internet-based telephony and video--gives Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.

Microsoft to acquire Skype