Microsoft to Buy Skype for $8 Billion+: WSJ (MSFT)

The Wall Street Journal is reporting Monday that Microsoft MSFT is in talks to acquire Internet phone company Skype for more than $8 billion. According to the report, "A deal could be announced as early as Tuesday, people familiar with the matter said, though they cautioned that negotiations aren't yet final and a deal could still fall apart. Including Skype's long-term debt, the total value of the deal is about $8.5 billion." Skype's popular web-based software allows users to make voice and video calls using the Internet. Calls are free when made Skype-to-Skype, and users can make calls to landlines and cell phones at lower rates than traditional phone services. Skype also gets revenue from voice mail and other services, and offers a platform for business communications. Representatives for Microsoft and Skype declined to comment. The report notes that "At a value close to $8 billion, the Skype deal would rank as the biggest acquisition in the 36-year history of Microsoft, a company that traditionally has shied away from large deals. In 2007, Microsoft paid approximately $6 billion to acquire online advertising firm aQuantive Inc. Many current and former Microsoft executives believe Microsoft significantly overpaid for that deal. But they are also relieved that Microsoft gave up on an unsolicited $48 billion offer for Yahoo Inc. nearly three years ago. Yahoo is valued at half that sum today." Shares of Microsoft Corporation closed lower by $0.04 Monday, to $25.83.