eBay to buy Skype

September 18, 2005

Looks like eBay is going to buy Skype …for a HUGE amount of money.

eBay plans to buy Net telephone provider Skype in a move aimed at boosting its sales volumes and supplying seamless voice communications to its consumers. Company executives said Monday that eBay plans to pay $1.3 billion in cash and $1.3 billion in stock to the global communications company. It has agreed to hand over up to an extra $1.5 billion, for a total payout of more than $4 billion, if Skype meets certain financial targets by 2008, according to a presentation to investors on Monday morning.

I’ve been reading places online that many people are confused as to why eBay would buy Skype. Personally, I think it’s an obvious and brilliant move. They are a huge market place with people interacting one on one. Confusion causes problems for both parties, and then ultimately for eBay. Confusion can run rampant with email communication, so imagine if eBay users can now quickly and easily connect to each other via phone – for free.

The real story here, however, is the growth of VOIP sevices that will certainly result. Now that eBay will be pushing Skype, people like my mom who wouldn’t know VOIP from HTTP are actually going to be using it. Where we go with telecommunications after this is going to be anybody’s guess, but we know it’s going to be cool.