Microsoft Corp. has agreed to buy Internet phone company Skype Technologies SA for $8.5 billion in cash, the most aggressive move yet by Microsoft to play in the increasingly converged worlds of communication, information and entertainment, The Wall Street Journal reported.

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Microsoft CEO Steve Ballmer.

Skype – a service that connects millions of users around the world by Internet-based telephone and video – has about 170 million people log in to use its services every month. Skype’s users made 207 billion minutes of voice and video calls last year.

Microsoft, which has invested heavily in improving the technology of its Bing search engine to try to keep up with Google Inc., completes the Skype deal as the largest acquisition in the 36-year history of the company.

Skype, which was launched in 2003, was purchased by eBay Inc. in 2005. The service was regarded as something of an experiment by eBay, and eBay sold a 70 percent stake to a group of technology investors in 2009.

For the full story in The Wall Street Journal, click here.