SwiftKey is known for its predictive keyboard app already installed on about 300 million Android and iOS mobile phones worldwide. The UK-based company called the takeover a "milestone" in its history.
The US software giant and the British app maker confirmed the acquisition in blogposts on Wednesday. According to media reports, Microsoft paid about $250 million (228 million euros) for SwiftKey, whose founders Jon Reynolds and Ben Medlock said the deal was "a milestone" in the company's history.
"Our mission is to enhance interaction between people and technology. We think these are a perfect match, and we believe joining Microsoft is the right next stage in our journey," they wrote in the blogpost.
The two SwiftKey founders also assured customers that their apps would continue to be available on Android and iOS devices "for free" as they remained "committed as ever to improving them in innovative ways."
According to Microsoft, SwiftKey's software - which replaces the default on-screen keyboard for smartphones and tablets - is currently installed on more than 300m Android and iOS devices.
Microsoft's executive vice-president of technology and research Harry Shum said the US technology firm would continue to develop SwiftKey's "market-leading keyboard apps." In addition, Microsoft was exploring "scenarios for the integration of the core technology across the breadth of our product and services portfolio."
Microsoft's main interest appears to be the app maker's predictive-text technology which the Redmond, USA-based technology firm hopes to integrate with its own Word Flow tool.
SwiftKey originally launched its app for Android devices in 2010 because Apple had banned independent keyboard apps for its iOS devices until 2014, when SwiftKey launched for those too.
The UK company's last financial result reported by its parent company TouchType Limited revealed that its revenues fell from 9.88 million pounds (13 million euros, $14.3 million) in 2013 to 8.4 million in 2014. It reported a net profit of 103,000 pounds in 2013, but a loss of 5.32 million pounds the following year.
SwiftKey said that the fall in revenue was due to its policy to switch to a "freemium business model where the initial download of its app was free.
SwiftKey is the latest in a number of Microsoft acquisitions of apps companies, including email app Acompli, calendar app Sunrise, productivity app Wunderlist and business communications app Talko, among others.
uhe/kd (dpa, Microsoft.com, Swiftkey.co.uk)