Microsoft close to acquiring Skype

Software company Microsoft is close to finalising a deal worth over $US7 billion to buy internet phone company Skype Technologies. This is the largest move made yet by Microsoft in the world of communication and entertainment.

The deal could be announced ‘done’ as early as tomorrow, people familiar with the matter stated. However they also mentioned that negotiations aren’t final yet and could still fall apart. The total value of the deal is estimated to be worth $US8.5 billion.

If Microsoft was to close the deal it would give the company a recognised brand name on the internet at a time when they are struggling to get more stability in the consumer market.

Microsoft has invested heavily in marketing and improving the technology of its Bing search engine. While it has made some market share improvements over the past year, Google still dominates the search industry.

The Skype deal would rank at or near the top of the biggest purchases made in Microsoft’s 36-year history. Microsoft is not known for making large deals, many current and former Microsoft executives are glad that the company didn't follow through on a $US48 billion offer for Yahoo. Yahoo is worth half that sum today.

Investors have become more and more concerned about Microsoft's ability to amass continued growth out of the Windows and Office software systems, as rival technologies from Apple, Google and other companies put more pressure on profits.