EBay eyes Skype
Published September 9th, 2005
EBAY is understood to be mulling over a possible $3 billion (£1.6 billion) bid for Skype, in a move that would see it take on Google and Microsoft for a slice of the rapidly growing internet telephony market.
The online auctioneer is believed to be in exclusive negotiations with Skype, the Luxembourg company that allows customers to make free phone calls to each other over the internet.
News of eBay’s interest in Skype took analysts by surprise, as it signals a change to the company’s strategy of making bolt-on acquisitions that complement its core auction site.
Skype has attracted feverish takeover speculation in recent weeks, heightened by announcements from both Google and Microsoft that they plan to enter the internet telephony market.
Last month, Rupert Murdoch, chairman and chief executive of News Corporation, parent company of The Times, confirmed that he had held discussions with Skype’s owners over a possible investment. However the talks ended after News Corp was told the company was not for sale.
Analysts said that eBay’s current membership base could provide a core from which it could roll out voice-based services.
Skype was founded by Niklas Zennström and Janus Friis, who previously founded KaZaA, the music download software maker.
The company, the world’s biggest provider of Voice over Internet Protocol (VoIP) services, is expected to turn cashflow positive this year. The company is thought to have about 50 million users.
Analysts at IDC, the research group, estimate that there will be 27 million users of VoIP services in the United States by 2009, compared with three million at present.
The growth in VoIP poses a threat to traditional fixed line telecoms groups, as consumers may begin to question the need for a separate land line.
Users in the UK and many parts of America must subscribe to a landline to get a broadband connection but it is possible to provide “naked DSL†— broadband without a phone line.
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