Microsoft to buy Internet phone company Skype

REDMOND, WASH. (AP) - Microsoft says it will buy the Internet phone company Skype for $8.5 billion in cash.

Buying Skype is giving Microsoft Corp. a potentially valuable communications tool as it tries to make a bigger splash on the Internet and become a bigger force in the increasingly important smartphone market.

Skype boasts about 663 million users worldwide who make voice and video calls over the Internet.