Redmond, Wash.—Microsoft Corp. announced Tuesday that it has agreed to purchase Internet communications company Skype for $8.5 billion in cash from an investment group led by Silver Lake.
The acquisition, the largest in Microsoft's history, will extend its real-time video and voice over Internet services for consumers and enterprise customers, according to Microsoft.
“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer, in a statement. “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.”
Once the deal closes, Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype division, reporting directly to Ballmer.
The acquisition has been approved by the boards of Microsoft and Skype, and is awaiting regulatory approval.
Skype was founded in 2003 and was acquired by eBay in September 2005. In 2009, an investment group led by Silver Lake purchased it.