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Microsoft buys Skype, bringing service to Xbox 360, Kinect

Platform holder closes £5 billion deal for internet phone service

Update: Added Microsoft comments

Microsoft has wrapped up a deal to acquire internet phone service Skype, reportedly at a cost of $8.5 billion (£5b).

The terms of the acquisition have come as a shock to analysts, who feel the deal vastly overvalues Skype.

Zoom

While Skype has 663 million registered users worldwide and gives Microsoft a foothold in voice and video communications, most of its existing services are free "and it has barely bumped along on profitability", the Guardian reports. It has debt of $686 million, which Microsoft will assume.

Microsoft said in a press release: "Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms."

CEO Steve Ballmer added: "Skype is a phenomenal service that is loved by millions of people around the world. 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."

A Skype application for PSP was launched in January 2008. Sony has also said it may be on the cards for PS3, while Skype has suggested it would technically be possible to bring the service to the DS platform.

[ SOURCE: Guardian ]

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