Steve Ballmer called the $8.5 billion deal to buy Skype "a significant opportunity" adding that Skype is "a great business" with "plenty of opportunities ahead...the promise of universal next generation communications."

At a press conference to announce the deal this afternoon, Microsoft CEO Ballmer said: "It became clear to us that we had even more opportunity to do more as a single company…we finalised price in mid-April and signed the deal last night."

The deal will be finalised towards the end of the year pending all necessary approval. There is as yet no roadmap for integration of Skype with Microsoft services.

Skype CEO Tony Bates added that it is "a big day. A big day for our users, our community. We have a sound business. We can keep growing the core assets."

Tony bates

SOLD: Skype CEO Tony Bates is to head up a Skype division at Microsoft

Bates joins Microsoft as head of a separate Skype division. Ballmer said he was impressed with the figures – the service has 170 million connected users, with 40 per cent growth year on year.

"First, we're committed to the Skype userbase today and into the future. We want to continue to build…that userbase," said Ballmer, who also pointed out that 40 per cent of Skype traffic was now video.

"Part of that commitment is to continue to support Skype development on non-Microsoft platforms" later saying "it's fundamental to the value proposition." Ballmer cited examples of Microsoft working on other platforms, such as Office for Mac.

However, Ballmer was sure to talk about optimising Skype for Kinect as well as Windows Phone 7 and integration with Outlook. He also talked briefly about "Messenger and Hotmail possibilities."

Ballmer also had a little dig at FaceTime. "It's pretty clear that people aren't using video on their phone and that is something we want to address at Microsoft. And take Kinect – we have given you a whole video conference system in your home for a few hundred dollars, so we will definitely act with that."

For business users, Lync 2010 – formerly Microsoft Office Communicator – will get Skype integration according to Ballmer.

"We create technology that makes life better for millions of people and companies across the globe," added Ballmer, talking more generally about the opportunity for Microsoft.

"Communications is the most fundamental area in which technology can be transformative…and there are plenty of opportunities ahead. We dream of building experiences that aren't limited by distance or device. The Skype brand has become a verb."

Skype

CONNECTED: Microsoft clearly sees Skype as a connection between home and work