Proving previous reports right, Microsoft announced Tuesday that it has agreed to buy Skype in an all-cash deal amounting to $8.5 billion.

“Skype is a phenomenal service that is loved by millions of people around the world,” Microsoft CEO Steve Ballmer said in a statement.

“Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Microsoft’s Skype acquisition will make the internet telephony company a business division of the Redmond, Washington-based company where Skype CEO Tony Bates will assume the title of president.

Giga Om first reported that the Windows OS-maker is in the final stages of a deal to buy Skype during the weekend. At $8.5 billion, the deal is Microsoft’s biggest acquisition yet.

“By bringing together the best of Microsoft and the best of Skype, we will empower people around the world with new technologies that should bring them closer together,” Ballmer said, according to the San Francisco Chronicle.

Skype is expected to be integrated into the Microsoft Xbox Live, Kinect, Outlook and Hotmail services. It is also expected to be integrated by Microsoft into its Windows Phone mobile platform.

About Solon Harmony Dolor

A passion for technology and journalism makes this upcoming writer very interested in social media and technology news. Fresh from finishing an English and Journalism degree from the University of the Philippines Diliman, he aims to bring interesting news to our readers .