Microsoft lands Skype; plus: Your music, Google's cloud

Microsoft -- the Redmond, Wash., software megabehemoth -- today announced its biggest acquisition ever: It intends to buy Skype -- the Internet telephone service once owned by eBay (EBAY) -- for $8.5 billion.

"Skype is a phenomenal service that is loved by millions of people around the world," Microsoft CEO Steve Ballmer said in a statement announcing the deal. "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."

Microsoft intends to maintain Skype as an independent business unit, with Skype CEO Tony Bates becoming president of the new Microsoft Skype Division. "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," Bates said.

The acquisition returns Skype -- founded in 2003 by Niklas Zennstrom and Janus Friss based on peer-to-peer technology created for their Kazaa music downloading service -- to ownership by a corporate tech giant. San Jose online auction powerhouse eBay, you might recall, bought Skype in 2005 for $3.1 billion; eBay later said that it paid too much in that deal.

By 2009, though, eBay sold a controlling stake in Skype -- in a deal worth about $2 billion -- to investors including two Silicon Valley venture capital firms, Silver Lake Partners and Andreessen Horowitz, as well as the Canada Pension Plan Investment Board.

"Today, I tip my hat to an old rival, Microsoft," Andreessen Horowitz partner Ben Horowitz wrote on his blog. "By acquiring Skype, Microsoft becomes a much stronger player in mobile and the clear market leader in Internet voice and video communications. More importantly, Microsoft gets a team, ably lead by the exceptional Tony Bates, that can compete with anyone."

On the GigaOm blog, Om Malik suggested the deal could be good for Palo Alto social networking powerhouse Facebook. "With Microsoft," Malik wrote, Facebook "gets the best of both worlds: It gets access to Skype assets (Microsoft is an investor in Facebook) and it gets to keep Skype away from Google."

Microsoft stock, by the way, finished regular trading today at $25.67, down 16 cents, or 0.6 percent, from Monday's closing price. Meanwhile,