MERGERS

Microsoft Buys Skype for $8.5B

Will officially announce deal Tuesday.

Microsoft has made a deal to buy the Internet phone company Skype for as much as $8.5 billion, Fortune confirmed on Tuesday. While Microsoft still makes money off its Office suite products, the company has lagged behind in getting its brand name in Internet services. Despite heavy investment and marketing for its Bing search engine, Google still dominates that market and accounts for 65 percent of all searches. Skype could also prove a valuable asset in getting into the mobile-phone market—another place dominated by Google’s Android and Apple’s iPhone. If the deal with Skype goes through, it will represent one of the biggest deals in Microsoft’s history.