Microsoft To Acquire Skype For $8.5 Billion

Following The WSJ report tonight which shows Microsoft, in what would be its most aggressive acquisition in the digital space, was getting closer on buying the online telephony and video communications giant Skype for $8.5 billion all in with an assumption of the company’s debt–$686 million.

Kara of AllThingsD has confirmed the deal is actually done and will be announced early tomorrow morning.

The purchase is a bold move for the software giant and its biggest acquisition in more than three decades.

The big price will give Microsoft–which has struggled in its online efforts and has lost billions of dollars for its work–a big brand name on the Web.

With Skype, which has been aggressively expanding, Microsoft will continue to lose money in its Internet efforts. Skype lost $7 million on revenue of $860 million. Operating profits, which Skype highlighted, were $264 million.

But, sources said, the concept is bigger than just money, including getting access to Skype’s 663 million registered users.

Skype has had a big-company owner before–eBay Inc. paid $2.6 billion in cash and stock for it in 2005, as a way for the auction site’s buyers and sellers to communicate.

Facebook and Nokia seemed to be interested in the acquisition too:

Other suitors have looked at Skype, including Google, although acquisition interest by Facebook was very much overblown, said several sources.

Interestingly, Microsoft’s new smartphone partner Nokia also held meetings with Skype’s CEO Tony Bates, a former Cisco exec who arrived at the company relatively recently.

Update:

The deal confirmed by Microsoft