CBJ – May 10 – Software conglomerate Microsoft Corp. has prepared a $8.5 billion all-cash offer to buy Internet phone and video service provider Skype Technologies, according to reports.

Analysts believe the move by Microsoft is a motivation to close a gap in the company’s lagging mobile offerings, a jump to compete with big-time mobile competitors Google and Apple Inc., developers of new technologies like the Android and iPhone, respectively.

The Skype purchase will mark the largest deal in Microsoft history.

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

Reports indicate that Skype CEO Tony Bates will assume the title of President of the new Microsoft Skype division.

The $8.5 million deal is about a 300 per cent increase of the price paid by Skype’s previous buyer, online auction host eBay. According to reports, other major cyberspace players, Facebook and Google, were also considering bids for Skype ownership. The deal will see Microsoft assume Skype’s losses, indicate reports, though these figures have not yet been reported.

Bates concluded, “Microsoft and Skype share the vision of bringing software innovation and products to our customers. Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”