eBay buys Skype

13 Sep 2005

Global online auction company eBay yesterday purchased Luxembourg-based VoIP provider Skype Technologies, in a move that it hopes will boost its online trading. eBay initially paid USD2.6 billion in cash and stock for the VoIP operator, although the total value of the deal could rise by an additional USD1.5 billion, based on ‘potential performance-based consideration’. The completion of the deal ends months of speculation about who would acquire Skype.

eBay, which will acquire Skype’s 54 million users in 225 countries and territories through the deal, said that it has no plans to become a web portal or a telecoms service provider, but instead hopes that Skype’s voice communications technology will make online trading easier for its users. Skype is expected to post revenues of USD60 million this year, a figure which it has forecast will grow to around USD200 million in 2006.