Microsoft Forks Over $8.5 Billion for Skype

The software company has made Skype its biggest purchase ever after outbidding rivals Facebook and Google.

Microsoft has just finalized the purchase of Skype, an online phone service, for $8.5 billion, the biggest purchase that the tech giant has ever made. Both Facebook and Google had been in the running to buy Skype from eBay and a group of investors, including the Canada Pension Plan Investment Board, but Microsoft appears to have sweetened the pot more so than the other two companies. Skype's popularity as a means of communicating – both via video and just voice – has exploded in the last five years, as it provides a low-cost alternative to telephones for long-distance calling. The company has just started to become profitable and now stands to give Microsoft an answer to Google Voice and Apple's new Facetime.