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Microsoft agrees to buy Skype for $8.5 billion

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NEW YORK (AP) - Microsoft has agreed to buy the popular Internet telephone service Skype for $8.5 billion in the biggest deal in the software maker's 36-year history.

Buying Skype would give Microsoft a potentially valuable communications tool as it tries to make a bigger splash on the Internet and become a bigger force in the increasingly important smartphone market.

The sellers include eBay and private equity firms Silver Lake and Andreessen Horowitz.

Skype boasts about 663 million users worldwide. According to regulatory documents, Skype users made 207 billion minutes of voice and video calls last year.

Most people use Skype's free calling services, which has made it difficult for the service to make money since entrepreneurs Niklas Zennstrom and Janus Friis started the company in 2003.

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Beginning of the end for a great product

Well, everyone say goodbye to Skype. I'm sure that Microsoft's purchase of the company is going to change everything. First, there will most likely not be any more free calling as Microsoft will be looking at the final dollar and not customer satisfaction. Also, I'm sure the program will become bloated and weighed down by too many useless options instead of being a communications tool.

As for Microsoft trying to get a hold in the smartphone market....that ship has sailed. Their smartphone OSs so far have lacked in features and functionality. I'm sure that they will merge Skype as a big part of their future smartphones. Those of us with serious smartphones (Android, Blackberry, PalmOS, etc) will most likely have to say goodbye to Skype on our phones within the next year or two. I say Skype will be sold off sometime in the next five years and it will be another great company that died at the hands of a mega-corporation.