Microsoft to buy Skype for $8.5 billion

-  Microsoft has agreed to buy Internet phone service provider Skype for $8.5 billion in cash, the companies announced Tuesday.

Skype -- currently owned by a group led by private equity firm Silver Lake -- will become a new business unit within Microsoft, which will be run by Tony Bates, the company's current chief executive.Microsoft said it plans to incorporate Skype's real-time video and voice communications into its existing product lines, including Office, Windows Phone and the Xbox gaming system.

As the largest acquisition in its history, the deal marks a significant change in strategy for Microsoft, which has not bought another