Video telephony service could cost $7 billion

Microsoft is close to acquiring Skype for more than $7 billion, according to a Wall Street Journal report published late Monday.

The software giant is said to be eyeing the online telephony service in hopes of improving its lot in the mobile marketplace, where rivals including Apple and Google have found considerable traction.

While $7 billion is a hefty price tag even by Microsoft standards, the sum could be worth it as the company looks to gain a core competency that could also be used to bolster other key initiatives, from operating system Windows Phone 7 to search engine Bing.

If the deal closes, Microsoft would be buying from a group of investors who purchased the company from eBay in 2007. They include venture capital firms Andreesen Horowitz and Index Ventures.

EBay first purchased Skype in 2005, just two years after it was launched, but struggled to wring meaningful revenues out of the company.

No word yet on a done deal, but the WSJ reports the acquisition could be announced as soon as Tuesday.

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