10 May 2011
Last updated at 18:18 ET
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Steve Ballmer (left) and Tony Bates promise “new capabilities and new features” for Skype
Microsoft has confirmed that it has agreed to buy internet phone service Skype.
The deal will see Microsoft pay $8.5bn (£5.2bn) for Skype, making it Microsoft’s largest acquisition.
Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a
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