And its Official Microsoft buys Skype

Microsoft has announced a deal estimated to be worth $8.5bn to buy Skype from investor group Silver Lake. Their press release already mentions support for existing Microsoft products such Xbox 360, Kinect and Windows Phones.

It is also stated that Microsoft will continue to support Skype clients on other platforms. It will be very interesting to see what direction they take in the mobile phone market where Skype has been a huge hit with customers. Will Microsoft bring new feature first to their platform or restrict or withhold features entirely from competitors.

Skype will become a new business division within Microsoft headed by Skype CEO Tony Bates.

Just last week both Facebook and Google were rumored to be in heated battle to buy Skype. Facebook were planning heavier integration into their social network behemoth. While acquiring the company for Google would have perhaps brought Google Voice to countries outside of the US.

With their recent tie up with Nokia and now the purchase of Skype, Microsoft have shown that they are still in the game and can still flex its financial muscle with the new kids on the block.

See the full press release.