Microsoft nears $8.5 bn Skype buy in web shift

This change was starkly illustrated last year when Apple's portfolio of coveted consumer goods propelled it past Microsoft to become the world's most valuable technology company. The maker of iPhones and iPads has since been named as the most valuable brand too, overtaking Google. Wholesale Battery

The Skype deal -- which would be the biggest in the 36-year history of the world's largest software company -- is expected to be announced as early as Tuesday morning, the source told Reuters. Microsoft and Luxembourg-based Skype declined comment. Wholesale Computers

The $8.5 billion mooted price tag, including debt, was a surprise. Although the sum would not stretch cash-rich Microsoft, some said it was high for a company whose ownership has changed several times during its relatively short life.

"In this atmosphere of Internet Bubble 2.0, picking up an unprofitable online company for roughly 10 times sales probably seems downright cheap," Shanghai-based Michael Clendenin, managing director of consulting firm RedTech Advisors, said.

"But if you consider (it) was just valued at about $2.5 billion 18 months ago when a chunk was sold off, then $8.5 billion seems generous and means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy," he added. LASER POINTERS

This was echoed by Ben Wood, head of research firm CCS Insight: "The big unanswered question is how do Skype assets work for Micrososft, they already have instant messaging, IP telephony...how do you justify the price?"

"That being said, Skype is a vibrant community, a diverse global community with a young population and Skype is making inroads into older parts of the population too," Wood added. wholesale baby monitor

Skype, which delayed plans for an initial public offering expected to raise $1 billion, has been looking at other options, including tie-ups with Facebook and Google. Such a deal was seen as valuing Skype at $3 billion to $4 billion.

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Despite doubling sales and profit in the last eight years, Microsoft's stock has largely languished, as investors worry about its ability to counter new rivals or adapt to new ways of computing, especially the threat posed by new mobile devices.

Microsoft has countered with a new version of its mobile software -- which will power the next generation of Nokia smartphones -- and is developing a new operating system that will work on low-power tablet PCs.

But online video chat remains a weakness. Although the company already has video in its Windows Live Messenger service, it is not available on its Windows Phone 7 software. wholesale spy camerca

Skype also makes versions of its own service for use on iPhone and iPad, Research in Motion's BlackBerry and Android phones. It cannot be used on Microsoft phones.

Apple's FaceTime video calling service -- available on its latest iPhone and Mac computers -- has been a big hit. Google recently followed suit by adding video to its popular Google Talk application for smartphones running on its Android system.