WSJ: Microsoft on the verge of paying $7 billion for Skype

Steve Ballmer's appearance at BlackBerry World in Orlando had people thinking about a Microsoft-RIM hookup as we reported. But Tuesday's WSJ is reporting that Microsoft has its sights set on another business-internet phone services company Skype. The paper says that a deal could be announced as soon as today and would cost the Redmond based firm from $7 billion to as much as $8.5 billion to become the largest acquisition in company history. So far, neither firm will comment on the story.

Skype connects millions of users on the internet through phone calls and through video chat. The company was founded in 2003 by Niklas Zennstrom and Janus Friis, the two men who created Kazaa, a file sharing service that allowed users to swap music back and forth for free. Skype was purchased in 2005 by eBay for $2.5 billion in cash and stock as the online auction company hoped that both parties to a transaction would use the free or low priced calls available on Skype to talk about transactions on eBay. When that failed, eBay sold the service in 2009. 70% of Skype went to tech investors Silver Lake Partners, venture capital firms Index Ventures and Andreessen Horowitz, and the Canada Pension Plan Investment Board, all of whom will score a huge profit if Microsoft indeed makes this purchase.

source: WSJ