According to the Wall Street Journal, Microsoft could announce as early as tomorrow a deal to buy Skype for a near record $7 billion dollars. The deal would be the largest acquisitions by Redmond in their 36 year history.
Rumors had been circling for a few days now that Microsoft and Skype would announce either some partnership or deal, but a full on acquisition was seen as less likely:
Microsoft Corp. is close to a deal to buy Internet phone company Skype Technologies SA for more than $7 billion, and a deal could be announced as early as Tuesday, people familiar with the matter said.
Negotiations were wrapping up Monday evening, and a deal could still fall apart, the people cautioned. Representatives for Microsoft and Skype declined to comment.
So nothing definitive yet, but even the move by Microsoft is sure gutsy and would certainly give them a solid brand name to stand behind.
Of course, what we're really interested is what this means for Windows Phone 7. Although we know Skype support is coming this fall, there's little doubt that Microsoft would not seize this opportunity to deeply integrate Skype into the OS at very low level, potentially giving VOIP and social networking a huge kick in the leg. The big issue would of course be carrier resistance, but that's another battle. All we know is this is very good news for our mobile OS, if this deal happens.
Stay tuned as the story develops.
Update: According to All Things D's Kara Swisher, it's a done deal and will be announced tomorrow morning. Reportedly the press-release comes at 5am PDT/8am EST.
Update 2: GigaOM is reporting that Microsoft paid $8.5 billion in cash for the company: $7b for the company, $1.5b in debt.
Update 3: Microsoft has issued a press release stating that they have entered into a definitive agreement under which Microsoft will acquire Skype for $8.5 billion in cash from the investor group led by Silver Lake. Skype will become a new business division of Microsoft with Skype CEO Tony Bats assuming the role of president of the Microsoft Skype Division. Skype will support Microsoft devices such as the Xbox consoles, Kinect and Windows Phones. The purchase agreement has been approved by both Microsoft's and Skype's Boards of Directors. Follow the break to read the full presser from Microsoft.