Original URL: http://www.theregister.co.uk/2005/09/12/ebay_bids_skype/

eBay buys Skype

Talking telephone numbers

By John Oates

Posted in Financial News, 12th September 2005 10:02 GMT

Online auctioneer eBay is buying VoIP provider Skype for $2.6bn.

A statement on eBay.com confirmed the takeover. EBay will pay $2.6bn in a mixture of cash and shares. Bonus payments of a further $1.5bn will be made if Skype hits certain targets.

Skype launched in beta in late 2003 and now claims over 53m registered customers and 2m premium customers. It provides free calls to other Skype users and much reduced charges for other phone calls.

Presumably eBay wants to bundle the services into its auction site, allowing people to talk to sellers to get more information on items offered for auction. But the statement from eBay also refers to "new lines of business".

The markets were unconvinced by rumours ahead of the official announcement and traders sent eBay shares down sharply late last week. Some analysts suggested eBay could benefit from a partnering deal with Skype without needing to buy the company.

The company was started by the people behind P2P network Kazaa - Niklas Zennstrom and Janus Friis. Both will keep their jobs and Zennstrom will report directly to eBay boss Meg Whitman.

Read eBay's statement here. ®