The deal was worth €2.5 billion, but negotiations broke down, according to weekend reports.
The London Independent newspaper, citing unnamed well-placed sources, said the talks between Skype Technologies and News Corp fell apart last month, just before Mr Murdoch’s son Lachlan quit his father’s empire.
The paper said Skype, which is based in Luxembourg and is privately-owned, had denied it was for sale, but industry sources said they expected the company to be taken over shortly. Officials at News Corp and Skype were not immediately available for comment.
Run out of London, Skype was founded by Niklas Zennstrom, a Swedish businessman who also co-founded Kazaa.
This is a file-sharing software provider and rival of Napster, and enables users to download music from the internet for free.
Skype’s free software allows users to make internet-based calls worldwide at no cost and is seen as a threat to traditional telephone companies.
The company’s free software is used by over 42 million users, with 150,000 new users signing up daily.