Today's Statesman reported ebay was buying Skype.
EBay to Buy Skype in $2.6 Billion Deal
By MATTIAS KAREN
Associated Press Writer
STOCKHOLM, Sweden The online auctioneer eBay Inc. said Monday that it will acquire Internet communications company Skype Technologies SA for about $2.6 billion in cash and eBay stock.
The total value of the deal may climb to $4.1 billion based on whether Skype meets a series of performance targets over the next three years, eBay said. The additional payments of $1.5 billion would be made in 2008 or 2009.
Ebay said the acquisition of privately held Skype will create "an unparalleled e-commerce and communications engine" for Internet users worldwide.
Skype's free software lets people talk for free over the Internet using computers and microphones. Such calls from low-cost Voice over Internet Protocol providers to landline telephones are creating upheaval in the telecommunications industry.
While some analysts had been skeptical about eBay's needs for a VoIP provider, the U.S.-based company said Skype would "strengthen eBay's global marketplace and payments platform, while opening several new lines of business."
"Communications is at the heart of e-commerce and community," eBay Chief Executive Meg Whitman said. "By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net."
Niklas Zennstrom, Skype's CEO and co-founder, said the deal will help move forward his company's goal to "revolutionize the ease with which people can communicate through the Internet."
Zennstrom will retain his position and will join eBay's senior executive team, the company said.
Skype has 53 million registered users and the company says more than 2 million people use Skype at any given moment. Since it was introduced in 2003, the company's free software has been downloaded more than 164 million times.
EBay, based in San Francisco, recently trounced analyst expectations by reporting it earned $291.6 million, or 21 cents per share, for the three months ended in June, a 53 percent increase from $190.4 million, or 14 cents per share at the same time last year. Revenue totaled $1.09 billion, a 40 percent increase from last year's $773.4 million.
The company raised its outlook for the rest of the year. The company forecast 2005 revenue of $4.3 billion to $4.4 billion, including as much as $1.05 billion in the current quarter. Excluding accounting items unrelated to it ongoing business, eBay expects 2005 earnings of 82 cents or 83 cents per share.
Overall, Ebay's community spanned 157 million registered users, up 10 million from March. Its online payment service, PayPal, also is becoming more pervasive, with 78.9 million accountholders who exchanged $6.5 billion during the quarter.
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