Microsoft (News - Alert) has completed the $8.5 billion acquisition of Skype – a week after European regulators gave their approval to the deal. The deal was announced on May 10, 2011, and the company’s boards of directors have also approved the purchase.

“Skype (News - Alert) is a phenomenal product and brand that is loved by hundreds of millions of people around the world,” Microsoft CEO Steve Ballmer said in a company statement. “We look forward to working with the Skype team to create new ways for people to stay connected to family, friends, clients and colleagues – anytime, anywhere.”

Skype is now a new business division within Microsoft, according to a company statement. Skype CEO Tony Bates (News - Alert) will now be known as “president of the Skype Division of Microsoft.”

Skype will offer its current products globally. The companies say that Skype “will also be integrated across an array of Microsoft products to broaden Skype’s reach and accelerate its growth as a fundamental way people communicate online.”

“Quite how and to what extent Microsoft will incorporate Skype into its products isn’t immediately clear, though Windows Phone (News - Alert) integration, for example, is expected,” commented DigitalTrends on the deal. “Whatever happens, Ballmer will be confident he can do more with Skype than eBay (News - Alert) did when the online auction site bought it in 2005 for $2.6 billion. eBay did little with the Internet phone company except apparently stare at it a lot, like an unsolvable puzzle, before selling it on four years later.”

As part of the deal, Skype employees will remain in offices globally, including Estonia, the Czech Republic, Russia, Sweden, the United Kingdom, Luxembourg, Japan, Singapore, Hong Kong, and the United States.

“By bringing together the best of Microsoft and the best of Skype, we are committed to empowering consumers and businesses around the globe to connect in new ways,” Bates said in the company press release. “Together, we will be able to accelerate Skype’s goal to reach 1 billion users daily,” Bates said. Skype now has more than 600 million users, according to media reports.

Skype was founded in 2003. It was acquired by eBay in September 2005, and then acquired by Silver Lake and other investors in November 2009. Other investors in the group led by Silver Lake include: eBay International AG, CPP Investment Board, Joltid Ltd. in partnership with Europlay Capital Advisors, and Andreessen Horowitz, according to the company press release.

In a recent statement, the European Commission concluded, “the deal would not significantly impede effective competition in the European Economic Area (The EU plus Iceland, Lichtenstein and Norway) or any substantial part of it.”

In his commentary on the deal, Jim Machi, senior vice president of Marketing at Dialogic Corporation, said on TMCnet that, “I see people writing that the main deal driver is to improve Microsoft’s position in the mobile arena, given Skype can work on iPhones and iPads … and Android devices.  And while I’m sure that is an important element, I believe that this deal is really about Microsoft extending its enterprise communications presence.”