eBay to acquire Skype

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Monday, September 12, 2005

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Online US-based auction company eBay, the world's largest online marketplace, agreed to buy Voice-over-IP (VoIP) firm Skype, the company providing the most popular internet telephony service, for $2.6 billion USD in cash, stock, and rewards, and may pay a further $1.5 billion if the company's financial targets are met in 2007 and 2008.

Skype technology is to be introduced on eBay's website, allowing sellers to receive calls or leads from the sites users, for a fee.

It is the biggest acquisition in eBay's history. The company hopes to diversify its profit sources and gain popularity in areas where Skype holds a strong position, such as China, Eastern Europe, and Brazil.

EBay expects to cut 2006 earnings per share by $0.12 due to the acquisition.

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