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.
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