kaptink writes: Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal. The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail. The company worked with the FBI this year to allow the NSA easier access via Prism to its cloud storage service SkyDrive, which now has more than 250 million users worldwide. Microsoft also worked with the FBI's Data Intercept Unit to "understand" potential issues with a feature in Outlook.com that allows users to create email aliases. Skype, which was bought by Microsoft in October 2011, worked with intelligence agencies last year to allow Prism to collect video of conversations as well as audio. Material collected through Prism is routinely shared with the FBI and CIA, with one NSA document describing the program as a "team sport".
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