Skype is being sold by an investment group led by Silver Lake , which acquired it from eBay. The group also consists of eBay International AG, CPP Investment Board, Joltid Limited in partnership with the Europlay Capital Advisors, and Andreesen Horowitz.

The announcement is pretty surprising, considering Skype has been said to have been in partnership talks with both Google and Facebook. Google and Microsoft are of course bitter enemies, while Facebook and Microsoft are partners. It will be interesting to see what this means in that area.

“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” added Skype CEO Tony Bates. “Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

“Tony Bates has a great track record as a leader and will strengthen the Microsoft management team,” Ballmer added. “I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft.”

Under the deal, Bates will become President of the new Microsoft Skype Division, and will report directly to Ballmer himself. He said on the Skype blog:

I believe this acquisition is the very best way to extend Skype’s reach and will allow us to bring real-time video and voice communications to more people around the world than ever before. The combination of Skype and Microsoft will directly benefit all of you who use Skype by ushering in a new era of generative ways for everyone to communicate.

What I love most about this company are the people who have made Skype a verb. Not only the team here at Skype and our partners, but everyone like you who uses Skype every day – you are the people who have made Skype what it is.

Let’s hope this acquisition goes smoother than the eBay’s acquisition of Skype. eBay completed its sale of the company in November 2009.

Skype has been steadily breaking its own records. In late March, the company announced that it hit 30 million users online at the same time. Earlier this year, Skype acquired mobile video streaming solution Qik.

Microsoft says Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will also continue to invest in and support Skype clients on non-Microsoft platforms.

According to the Windows 8 Center blog, who offers a detailed description of the leak, the version that escaped from the Redmond labs is the first build of the 8 environment and for hackers who are reading, the full build string for the version that leaked is 6.1.7850.0.winmain_win8m1.100922-1508_x86fre_client-enterprise_en-us.iso. While that particular description isn’t very revealing, it’s pretty clear we’re dealing with the Enterprise edition of Windows 8.

Currently, Windows 7 features the following versions: Home, Home Premium, Professional, and Ultimate. Will the Enterprise edition of 8 replace any of these or will it be another version users can upgrade to? Of course, this information can only be answered with speculation, because it’s doubtful the Microsoft developers would be forthcoming about such an important piece of software that isn’t even scheduled for release was just recently schedule for a September reveal and its first public beta. The Windows 8 Center offers some ideas about these upcoming features, but again, this is all speculation:

As an early build, many of the leaked features we have written about may not be present. As well, several features such as the installation wizard seem to have still maintained the Windows 7 look. This should not come as a surprise since most aesthetic changes occur in the Milestone 3 branch.

While the information about the initial leak is rather limited, there are some screenshots of it:

Click for larger images

Naturally, there’s absolutely nothing about release dates, even from a speculation point of view. Nevertheless, it’s refreshing to see Microsoft improve on something that works instead of trying to reinvent the wheel, er, operating system.

We don’t know exactly when we’ll see the fruits of the company’s partnership with Nokia, but that could be an indication right there. While nothing has been officially announced in terms of dates, Nokia CEO Stephen Elop did suggest that Nokia Windows Phones would come out this year.

Dean Hachamovitch, Corporate Vice President of Internet Explorer said, "We’ve worked closely across the Windows Phone and IE teams over the last few months to deliver the same IE9 browsing engine—the same code, the same standards support, the same hardware acceleration, the same security and privacy protections—for Windows Phone as we’ve delivered on the desktop."

"As a result, when you compare different browsers side by side using official W3C standards tests, for example here, you can expect very similar results for IE9 on Windows Phone and the Windows desktop," he added. "When you compare side by side browser performance, for example here or here, or running the FishIE Tank demo, you can still expect very similar results. You can also expect similar results comparing the security and privacy protections, for example here and here."

MicrosoftComing to Windows Phone in 2011: Twitter in the People Hub, additional SkyDrive support, Internet Explorer 9, and expanded multi-tasking. Visit Microsoft News Center for the full details, then come back here and share your thoughts.1 hour ago 207 likes 44 comments

Other things announced by Ballmer:

First Major Update 
A free customer update will be made available for all Windows Phones in the first two weeks of March, which includes new capabilities such as copy & paste and faster application performance.

Availability on CDMA Networks 
With added support for CDMA networks, Windows Phone will be available to even more customers on mobile operators such as Verizon and Sprint in the first half of 2011.

Twitter Integration in the People Hub 
The popular social networking service Twitter will be integrated into the People Hub in the second half of 2011.

Office Document Storage in the Cloud 
Document sharing and storage in the cloud via Windows Live SkyDrive will be added to Windows Phone in the second half of 2011.

Additional Multi-tasking Capabilities 
We will add the ability to switch quickly between applications, run applications in the background (such as listening to music), along with a number of other capabilities in the second half of 2011. Developers will learn much more about this during April’s MIXconference.

According to a recent report, Microsoft outbid Google for the Nokia deal, and is paying billions for it. 

Having worked with Immelt in the past, Ballmer apparently wanted the world to know where he stands. He released the following statement on the Official Microsoft blog:

"Jeff Immelt and I started our careers together at Proctor & Gamble, and I have enormous respect for the success he’s had at GE. He is an ideal business leader to chair the President’s Council on Jobs and Competitiveness and help drive a focus on what we can all do to increase American competitiveness and create new jobs."

Microsoft is all about some competitiveness lately, as evidenced by the company recently joining Fairsearch, the coalition ruffling Google’s feathers over its pending acquisition of ITA Software. 

Yesterday during Google’s earnings call, Schmidt managed to sneak in a jab at Microsoft (at least that’s how we interpreted it) by saying that Googe’s competitors are assisting in spreading misinformation about competition. 

Schmidt has referred to Bing as its main competitor in recent months, and Google told us a while back, "Microsoft is our largest competitor and lobbies regulators against every acquisition we make."

"Sales professionals are at the heart of almost every successful business," said Ballmer. "Microsoft Dynamics CRM redefines productivity by offering an industry-leading product that is fully embracing the cloud. The things that make Microsoft Dynamics CRM an industry leader include giving sales professionals a familiar user experience, enabling greater collaboration, streamlining of processes and access to real-time data so they can improve their customers’ experiences and effectively compete in the market."

"The service is available today as a cloud offering," he said. "This is the first time we’ve made a release in the cloud before we have done so in the server version, and I think that really reflects the push by Microsoft into the cloud."

"I think our customers are really going to embrace this new release," he added. "It brings with it the ease of use that sales, marketing and service professionals expect; the ease of deployment for departmental managers; low cost and agility for IT; and most importantly, the kind of functionality, capability and value that’s really going to drive revenue and drive customer satisfaction."

"(It) was a very, very exciting year for our customers," Ballmer said. "We launched Windows Phone 7, Office 2010, and Kinect, and we introduced Internet Explorer 9 and Office 365. We saw great growth in our Bing and Azure services, and with the amazing success of Windows 7, it’s truly been a year like none other." Microsoft has a billion customers, the company says. 

"The products that I mentioned resulted from big technology bets that we’ve made," added Ballmer. "Bets on the cloud, natural user interface, new smart client technology, machine learning."

Here’s Steve Ballmer’s Keynote:

So what’s coming from Microsoft? 

The Next Windows

The next version of Windows will support System on a Chip (SoC) architectures, including ARM-based systems from NVIDIA, Qualcomm and Texas Instruments, the company announced. 

"With today’s announcement, we’re showing the flexibility and resiliency of Windows through the power of software and a commitment to world-class engineering. We continue to evolve Windows to deliver the functionality customers demand across the widest variety of hardware platforms and form factors," said Steven Sinofsky, president of the Windows and Windows Live Division at Microsoft."

More on this here.

Tablets

Ballmer introduced a new lineup of Windows 7 tablets. Including: a dual-screen PC from Acer, the Samsung PC 7 Sliding Series, and an Asus Tablet PC. Mashable has a good write up on these. 

It will be interesting to see how the devices compete with the iPad in the future. My hunch is that when combined, they will do just fine. As long as consumers are using tablets with Windows, Microsoft will be happy. 

Surface

Microsoft and Samsung unveiled the next generation of Surface, giving LCD panels "the power to see without the use of cameras." People can share and collaborate using a large, thin display that recognizes fingers, hands and other objects placed on the screen. More on this here.

Xbox/Kinect

The company is aiming for Xbox to become the "hub of your living room". They announced new Kinect-enabled entertainment experiences, and new Xbox Live gaming titles. Hulu Plus will also be coming to Xbox Live.

"It is your gaming system, but it’s your movies, it’s your TV shows, and it’s your sporting events. It’s your social interactions, all delivered directly to the biggest screen in your house."

The Xbox team introduced a new social experience called Avatar Kinect that will use Kinect’s camera and sensor and facial recognition technology to let a person control their avatar’s movements and expressions; when they smile, frown, nod and speak.  More on this here.

The company also affirmed a commitment to gaming on other platforms like the PC and Windows Phone 7.

The company has not confirmed, and the sources of the info are unnamed, but evidently trusted by the New York Times, which reports: 

The Samsung device is described as "similar in size and shape to the Apple iPad, although it is not as thin. It also includes a unique and slick keyboard that slides out from below for easy typing."

The people familiar with this device said it would run the Windows 7 operating system when in landscape mode, but will also have a layered interface that will appear when the keyboard is hidden and the device is held in a portrait mode.

Apple’s iPad has been a huge seller. Can Microsoft’s platform attain similar success? A keyboard and familiar Windows interface would no doubt be appealing to a lot of users, particularly if it is just an option that is available alongside a more iPad-like touch interface. This could provide the best of both worlds if it’s done right. 

One of the biggest complaints about the iPad is that it’s not the easiest thing to type on, particularly if you have large hands. 

Microsoft is a little late to the market in this space, but apparently not as late as it was to the smartphone market (with the recent launch of Windows Phone 7). Granted, we don’t know when these knew slates would actually see the consumer market. 

Microsoft is of course not just competing with Apple, but all makers of tablets and mobile computer operating systems, and that includes Google, which is gearing up for the consumer launch of its Chrome operating system next year. It’s not on tablets, but it’s still going to be an option for consumers looking for a new mobile computer. Most people aren’t going to buy a tablet and a notebook. Google has the tablets covered with Android, however, like with the Samsung Galaxy Tab, and more to come. 

No matter how you slice it, iPad sales are bound to be affected, simply based on the fact that it won’t be the only option in its class anymore. It will be particularly interesting to see how big of a hand Microsoft has in the competition. 

To be fair: no one’s claimed that they observed the CEOs of Microsoft and Twitter signing a single document or even talking shop.  Plus, the source of the rumor hasn’t been cited.

Victoria Barret just wrote, "This just heard: Microsoft chief executive Steve Ballmer had breakfast this week in San Francisco with Twitter’s Dick Costolo, who recently took over the top dog spot from co-founder Evan Williams."

Still, there’s reason to believe something significant could have happened.  Bing announced a search deal with Twitter before Google, after all, and yesterday, one Microsoft exec had no problem admitting that his company once tried to buy Facebook.

It’s a simple fact that Microsoft isn’t short on cash, either.

We’ll see what happens.  A colleague did spot the fail whale earlier today, so perhaps Twitter could use some of Microsoft’s technical expertise.

Many details remain unclear; apparently specific terms are still being hammered out being the scenes.  Still, Ben Popper was able to report, "Under the new plan, Microsoft will power all the city’s computer needs, consolidate their server and data storage, and allow city employees to choose from different levels of licensing, depending on their needs."

Also, it seems that the agreement is "is projected to save the city $50 million over the next five years."  Which is a rather stunning amount.

(Los Angeles’s implementation of Google Apps, by comparison, is only supposed to save the city something like $5.5 million during the same period.  And Los Angeles has close to half the population of New York, although there are no doubt many other factors at play.)

So if all goes well, this development should greatly benefit New York, and it will count as a major win for Microsoft, too.  After all, other cities may want to realize similar savings by moving to the cloud, and may want to follow New York’s lead by having Microsoft, not Google, provide the necessary tech support.

This is a story we’ll be sure to follow.

UPDATE: A source familiar with the situation weighed in to provide a different perspective.  One major point worth considering: this new contract is supposed to stem more from a renewal of an existing agreement than any competitive bid process.  Microsoft essentially bid against itself.

Another interesting detail: whereas Google’s deal in L.A. involved a definite switch to the cloud, it’s possible that not a lot of New York City employees will use Microsoft’s cloud software.  Microsoft’s Business Productivity Online Standard Suite may just remain a sort of option for casual workers while most employees stick to traditional solutions that’ll also be available.

Finally, to return to the subject of competition and pricing, Google’s L.A. deal related to email, not the whole span of products New York’s arranging to use.  Also, a Google spokesperson told WebProNews, "When there is a competitive bid process – like Colorado, Los Angeles and Wyoming – the majority of customers choose Google, and the rest get a great deal on their Microsoft license."