Microsoft Close To $8B Deal For Skype

Dow component Micrososft MSFT, the world's largest software company, is reportedly close to a deal to acquire Internet telecom company Skype for $7 billion to $8 billion. A deal could be announced as early as Tuesday, the Wall Street Journal reported, citing sources with knowledge of the deal. Including debt, the deal could be worth up to $8.5 billion. If Washington-based Microsoft doles out $8 billion or more for Skype, it would be the largest purchase in the software giant's corporate history. Microsoft tried to acquire Yahoo YHOO, the second-largest provider of Internet search services, for $48 billion several years ago, but those talks fell apart. Skype be an interesting fit for Microsoft's Lync unit, which combines email, instant messaging and voice communications into a single application, the Journal reported. Founded in 2003, Skype was purchased by eBay EBAY in 2005 for $2.6 billion. The marriage with eBay never panned out as hoped and the online auction site sold a 70% stake in Skype to a group of investors in 2009. Those investors, including Silver Lake Partners, Index Ventures and Andreesen Horowitz an the Canada Pension Plan Investment Board, could reap handsome profits if Microsoft does in fact acquire Skype, according to the Journal. Skype, which was not profitable last year, has more than 600 million users around the world. A move to acquire Skype could be Microsoft's latest effort to challenge Apple AAPL and Google GOOG in the mobile phone market. The company is also partnering with Nokia NOK, another company that has been left in the dust by Apple and Google in the smartphone war. Luxembourg-based Skype had filed plans last August to raise $1 billion in an IPO. The company has also been linked to deals with Facebook, Google and Cisco Systems CSCO, the Journal reported.