eBay acquires Skype for $2.6 billion |
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Published
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Mon, 12 Sep 2005 18:05
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LONDON - Online auction giant eBay has completed the purchase of Skype, the Internet telephony company that offers a wide range of VoIP services. The deal is reportedly worth $2.6 billion in cash and shares. A clause in the agreement also provides up to $1.5billion as bonus based on the results delivered by the company.
Niklas Zennstrom and Janus Friis, Skype's Swedish founders are set to be multi-millionaires courtesy this very lucrative deal. Skype's balance sheet read $7 million last year and the company hopes to rake in $60 million this year. The software that is used to make Internet calls is free for downloading and has been downloaded nearly 163 million times.
Since, the software does not bring in any revenue, analysts say that eBay's perusal of Skype is somewhat confounding. Meg Whitman, President and Chief Executive Officer of eBay sought to clarify the reasons behind the deal by saying, "Communications is at the heart of ecommerce and community.
By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net." The method adopted to do this is however not so clear at the moment.
It must have been a tough decision for Skype to give in to the deal since these are very exciting times for online communications, but in the end, it was an irresistible offer, "We're great admirers of how eBay and PayPal have simplified global ecommerce and payments. Together we feel we can really change the way that people communicate, shop and do business online,” said Janus Friis, Skype co-founder and senior vice president at the company. Both Friis and Niklas Zennström will retain their positions at Skype and join eBay's senior team as well.
The VoIP segment has witnessed major moves in the last couple of months with search giant Google introducing Google Talk.
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