Net-based phone firm seen fetching bids up to $5 billion
SAN FRANCISCO -- EBay Inc., the world's largest online auction company, is reportedly in talks to buy Skype Technologies SA, a provider of Internet phone service, for at least $2 billion. The Wall Street Journal reported eBay (EBAY: news, chart, profile) is in talks to acquire European-based Skype for between $2 billion and $3 billion, citing unnamed sources familiar with the matter. The New York Post reported eBay's offer was as high as $5 billion. A Skype spokesperson reached by MarketWatch said the company wouldn't comment on market rumors. "Skype is focused on building a successful company for the long term," the spokesperson said. An eBay spokesman declined to comment. Skype lets users make calls over the Internet for free using their personal computers. The privately-held company says it has more than 50 million users worldwide, and several analysts estimate its revenue this year will be between $50 million and $60 million. Buying Skype for the amounts reported would be a risky and expensive bet for eBay, which has used previous acquisitions to strengthen its dominant position in auctions rather than pursue new markets. Following the reports, eBay shares were down $1.55, or 3.8%, to $38.90 in afternoon trading. Still, analysts said Skype's service, which also includes video calling and instant messaging, could help eBay improve customer service and boost its presence overseas. See full story. EBay's most high-profile acquisition, .............
............... of electronic payment service PayPal, now accounts for about one-fourth of the online giant's total revenue.
Skype, based in Luxembourg with offices in the U.K. and Estonia, was founded by Niklas Zennstrom and Janus Friis. The pair designed the popular KaZaA software that allows music lovers to download digital songs from each other's PC's over the Internet.
Skype members can also send instant messages to each other, and make voice calls to another person's phone for a small fee.
According to its Web site, Skype has received funding from Fisher Jurvetson, Index Ventures, Bessemer Venture Partners and Mangrove Capital Partners.
Rivals of eBay, including Yahoo Inc. (YHOO : news, chart, profile) and Google Inc., (GOOG : news, chart, profile) already have begun to look at ways to add telephone services to their offerings.
Comments