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Wednesday, September 14, 2005

Ebay acquires Skype!! Why?


This week Ebay acquired company Skype for $1.3 billion in cash and $1.3 billion in stock and could pay up to $1.5 billion more if Skype meets financial targets. The big question is why would an online auction company buy an internet telephone company? My guess is that they were actually afraid that Google might acquire it. Ebay’s shares have already dropped significantly in the past 12 months, thanks to Google’s Adsence. Ebay definitely did not want Google to dominate another filed (IP based telephony). But the reason given by industry experts is that Ebay might use the services of Skype for better communication with its customers. I'm not sure if eBay really needs to buy a company like Skype to add another form of communications to its service. What ever the intentions were Ebay has certainly taken a very big risk by acquiring Skype.

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