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Report: Microsoft near $7 billion deal for Skype

Software giant is in talks to buy the Internet phone giant, and a deal could be announced as early as tomorrow, according to a Wall Street Journal report.

Microsoft is putting the finishing touches on a deal to buy Internet phone company Skype for between $7 billion and $8 billion, and a deal could be announced as early as tomorrow, according to a Wall Street Journal report.

The report cited people familiar with the matter who said negotiations were ongoing and could still fall apart. Microsoft representatives did not immediately respond to a request for comment.

The Luxembourg-based company provides a software-based communications service that allows people to make free voice and video calls over the Internet to other Skype users using almost any Internet-connected device. The voice over Internet Protocol, or VoIP service also allows people to make and receive calls from regular telephone numbers using a paid service.

Interest in the Internet telephony giant has been high since online auction giant eBay, which had acquired Skype in 2005, sold off its controlling interest in Skype. Facebook and Google had previously been mentioned as possible suitors for the company, which has been around since 2003 and averages 124 million connected users per month.

Skype filed plans in August 2010 for an initial public offering that was widely expected to raise about $1 billion. However, those plans were delayed after Skype appointed former Cisco Systems executive Tony Bates as its new chief executive in October 2010.

The $7 billion valuation would place the deal among Microsoft's largest acquisitions. In 2007, the software maker completed its $6 billion takeover of Internet advertising firm Aquantive.