According to sources at the Wall Street Journal
and The Guardian
, the Redmond company is finalising discussions centred around the acquisition of the VoIP messaging and video calling service.
The deal will be a new record for Steve Ballmer's Microsoft in recent years (its last biggest deal was $6 billion for the acquisition of aQuantive in 2007), making it clear that the company is dedicated to winning the bidding war.
If the deal goes through successfully Microsoft will be taking in some 660 million additional users under its wing. Analysts have however suggested that the $8.5 billion deal is a vast overpayment for the company.
While Skype has a good name among its userbase, most of its services are still offered free of charge, meaning the company isn't exactly the most profitable. Last year Skype recorded a $7 million loss on revenues of $859.8 million.
This isn't the first time Skype has changed hands either, in 2005 the company was purchased by eBay for $2.6 billion, but after its plans around increased buyer/seller communication ran dead it sold off 70% of its stake at the end of 2007.
Skype has however for long been a threat to traditional voice carriers, using data links to enable customers to make voice calls, video calls and send text messages over an internet connection for free.
It's thought that Skype may eventually be integrated into upcoming Windows Phone devices, while other possibilities include integrating Skype with the Xbox 360 and Kinect, enabling an entirely new video interaction experience over the console. Time will tell what Microsoft decides to do though, with the deal expected to be officially announced later today.