Bill Gates advocated Microsoft Skype takeover

Microsoft founder Bill Gates has said that he advocated the company's takeover of internet phone service Skype, and called on the other board members to back the move.

Last week, Microsoft agreed an £8.5bn (£5.26bn) deal for the loss making Skype, the biggest acquisition in the company's 36-year history, giving it access to 663 million internet telephony users worldwide.

Discussing the acquisition, Microsoft chairman Gates told the BBC's Hardtalk programme: "I was a strong proponent at the board level for the deal being done.

"I think it's a great, great deal for Skype. I think it's a great deal for Microsoft."

Skype, which uses Voice over Internet Protocol technology, has struggled to make a clear profit in the eight years since it was founded. Last year, Skype posted revenue of $860m, delivering $264m in operating profits, but the company still endured an overall loss of $7m.

However, Gates said that the decision to purchase the Luxembourg-based company was strategic, with an eye on the lucrative video conferencing market.

"The idea of video conferencing is going to get so much better than it is today. Skype actually does get a fair bit of revenue," said Gates.

"It'll be fascinating to see how the brilliant ideas out of Microsoft research, coming together with Skype, what they can make of that."

Skype is to become a new business unit within Microsoft, led by Skype chief executive Tony Bates under the title of president of the Microsoft Skype Division. Its technology will also support various Microsoft devices, including the Xbox 360, Kinect and Windows Phone.