Microsoft has finalized the $8.5-billion acquisition of VoIP service Skype, initially announced in May 2011.

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of that division.

The deal had to pass regulatory approval in several markets, with Europe being the biggest hurdle for Microsoft. The EU Commission has previously fined Microsoft for antitrust behavior.

Skype was founded in 2003 by Niklas Zennström and Janus Friis; it was acquired by eBay in 2005, but eBay couldn't find a way to integrate it into its business and subsequently sold it to an investment group led by Silver Lake in 2009.

As for the future of Skype and the challenges Microsoft faces, the first and foremost will be the fact that Skype is not yet profitable. But Skype has huge user base with more than 663 million users and 170 million of which use the service monthly.

Together, we will be able to accelerate Skype's goal to reach 1 billion users daily, said Bates in a statement.

Skype is a phenomenal product and brand that is loved by hundreds of millions of people around the world, said Microsoft CEO Steve Ballmer. 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.