UPDATED: Microsoft announces Skype buyout

— 6:00 AM on May 10, 2011

Over the past little while, I've caught glimpses of rumors about Skype being up for grabs. Well, last night, the Wall Street Journal chimed in with this bombshell: Microsoft is engaged in buyout negotiations with the voice-over-IP firm.

The Journal says the acquisition, which is reportedly valued at roughly $8.5 billion, might be announced "as early as Tuesday." However, the Journal's sources believe negotiations might fall apart at the last minute because they "aren't yet final." So, you know, shareholders might not want to start shifting stock around just yet.

Still, for the Wall Street Journal to go to print with this story, one has to assume it's got some weight behind it. The publication has broken the news about a number of other major developments in the tech industry—including Microsoft's plan to offer Windows for ARM systems. Microsoft buying Skype also makes some sense, considering the software giant's push to catch up with Apple and Google in the smartphone race.

I think I'd welcome Microsoft snatching up Skype, especially if it meant the client application got a veneer of extra polish. Skype offers a great service for free, but I'm not thrilled with how the app has evolved over the past few years... and how buggy it can be sometimes.

Update 8:59 AM; Microsoft has officially confirmed the acquisition. The deal is indeed worth $8.5 billion, and the two companies "hope to obtain all required regulatory clearances during the course of this calendar year."

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