Business experts question whether internet phone service Skype could be worth price after recording losses last year.

This article titled “Microsoft’s bn Skype deal shocks analysts” was written by Charles Arthur, technology editor, for on Tuesday 10th May 2011 06.38 UTC

Microsoft is reported to have closed a .5bn (£5bn) deal for the internet phone service Skype, in a deal that has shocked analysts who think it would be a substantial overpayment for the company.

The acquisition, which is expected to be announced on Tuesday, would be Microsoft’s biggest, ahead the bn it paid for online advertising company aQuantive in 2007, and would bring it 660 million users worldwide while giving it a foothold in voice and video communications. Analysts suggested the service could be integrated into existing Microsoft products such as its Xbox 360 games console and Kinect gaming systems, or even into its flagship Office product to let users collaborate more effectively.

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