Microsoft Buys Skype for $8.5B

It's official: Microsoft will buy popular online telephone service Skype for $8.5 billion in cash, reports the Wall Street Journal. The deal is the largest in Microsoft history, besting the company's 2007 acquisition of online ad service aQuantive for $6 billion. Though Microsoft produces the world's most common consumer operating system, it has struggled to create a significant online presence, something Skype's 663 million user could help with. EBay bought Skype for $2.6 billion in 2005, but the experiment failed and Skype was sold to other investors in 2009. Last year Skype lost $7 million on $860 million in revenues. (More Skype stories.)