Microsoft offer $8.5 Billion to acquire Skype

on Tuesday Microsoft announced that they would buy Skype Global for $8.5 billion in cash — the largest acquisition ever for the technology giant.

The deal will give Microsoft a boost in voice and video communications, allowing the company to leverage Skype’s technology on a variety of platforms, including Xbox 360, Kinect and Outlook. It may also help Microsoft’s fledging mobile telephone offering, which lags far behind Apple’s iOS and Google’s Android operating systems. In 2010, Skype users had 207 billion minutes of voice and video conversations.

“Skype is a phenomenal service that is loved by millions of people around the world,” Microsoft chief executive 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.”

Despite its popularity, the service has struggled to maintain profitability. Since most of its services are free, Skype makes much of its profits from a small group of users who pay for long distance calls to telephone numbers. In 2010, Skype recorded $859.8 million in revenue but notched a net loss of $7 million, according to a filing.