CEO Steve Ballmer described Microsoft's $8.5 billion cash offer to buy Skype as "unsolicited" during a webcast press conference Tuesday morning.

Skype CEO Tony Bates, soon to be president of a new Microsoft Skype Division, sidestepped answering a question about competing bids, rumored to include both Google and Facebook. The All Things Digital blog claims there was no serious rivalry "beyond initial flirting." Given the sky-high valuation, one wonders if Microsoft knew that.

Ballmer said Microsoft decided it wanted Skype and went straight to Silver Lake, Skype's biggest shareholder. The price was finalized on April 18 and the definitive agreement signed Monday night.

Reuters says Microsoft didn't bother to use an investment bank to advise it on its single biggest deal ever. The negotiations were a homegrown affair with CFO Peter Klein carrying the ball, saving Microsoft $25 million-$30 million in fees. Skype used Goldman Sachs and JPMorgan, which will probably cost it about $30 million-$35 million.

Of course Ballmer could have saved himself a lot more money if he had bought Skype 18 months ago when eBay was practically trying to give it away. Silver Lake Partners and friends bought 70% of the place for about $2 billion, but had to deal with Skype's unpleasant founders, the crafty Niklas Zennstrom and Janus Friis, who were suing eBay et al over the core technology that Skype shares with their older copyright-impinging P2P file-sharing scheme Kazza.

Zennstrom and Friis wound up getting cut in on the Silver Lake deal for 14% of the recycled Skype. The New York Times figures that accommodation puts them up $1.1 billion plus what they made from eBay.

Anyway, since Skype is officially headquartered in Luxembourg, Microsoft is going to use money it's got salted away in overseas banks to pay for the thing, avoiding the black tax hole of repatriation. Ballmer maintains that the acquisition will be accretive "immediately."

A lot of Microsoft's long-suffering stockholders would have preferred a sweeter dividend instead. One of the larger ones, the Yachtsman Fund, went on CNBC and described the deal as relatively "small" under the circumstances - it's only a quarter's worth of cash to Microsoft after all - but suggested it could be Ballmer's swan song if it doesn't pan out.

Along with integrating Skype with Microsoft wares like Xbox, Kinect, Windows Phone, Lync, Outlook and Xbox Live, Ballmer and Bates expect to use Skype to invent a new advertising-based revenue stream.

Technologically, much of future success of Skype apparently depends on people's tastes turning strongly to video conferencing, putting it directly in Cisco's line of sight.

Bates has visions of billions of users. "Everyone on the planet," he said. Skype is currently enrolling 600,000 people a day; at least its free service is. Revenues in 2010 were up 20% year-over-year to $860 million but the eight-year-old company was still unprofitable despite margins of 31%.

Microsoft also has to be careful not to alienate the carriers it expects to sell its phone. Ballmer admitted at one point Microsoft "has some work to do."