Microsoft Wants to Buy Skype for $8.5 Billion

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In one of the biggest deals in software history, Microsoft agreed today to buy Skype for $8.5 billion. It's estimated that 170 million people log onto the popular Internet telephone service each month. Skype users logged 207 billion minutes of voice and video calls last year. Most of the usage was free, calling computer to computer. The sellers of Skype SA include eBay Inc. and private equity firms Silver Lake and Andreessen Horowitz.

Microsoft said it will integrate Skype's functions into its Xbox game consoles, Outlook email program and Windows-based smartphones. The Skype takeover tops Microsoft's biggest previous acquisition, a $6 billion purchase of aQuantive, an online ad service, in 2007. Skype is expected to become a new business division of Microsoft.