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  • Report: Ebay in talks to buy Skype

    EBay in talks to buy Net phone firm Skype
    Report: Web auction firm mulls deal valued at up to $3 billion
    The Associated Press
    Updated: 3:44 p.m. ET Sept. 8, 2005

    STOCKHOLM, Sweden - EBay Inc. is reportedly in talks to buy Internet-telephone company Skype Technologies SA for $2 billion to $3 billion — news that sent the Internet auction site's shares lower.

    Skype co-founder and Chief Executive Niklas Zennstrom declined to comment Thursday on the Wall Street Journal report.

    “There are different rumors every day,” Zennstrom told The Associated Press. “We don’t comment on rumors. When we make deals, we announce them.”

    Hani Durzy, eBay’s spokesman, said his company also does not comment on rumors or speculation. Ebay had said in April it may forge partnerships with mobile-phone and Voice over Internet Protocol providers.

    Skype’s free software lets people talk over the Internet using their computer and microphones. Calls to landline telephones are also possible at costs that, along with other low-cost Voice over Internet Protocol providers, are creating upheaval in the telecommunications industry.

    Analysts have said that Skype, which is privately held, could fetch between $3 billion and $5 billion, largely because of its prominence on the VoIP field and because of its number of users. Skype has 53 million registered users and the company says more than 2 million people are using Skype at any given moment. Since it was introduced in 2003, the free program has been downloaded more than 151 million times.

    Scott Devitt, an analyst with Legg Mason, said in a research note that eBay’s expertise in the online world, coupled with its own well-known brand name, could add Skype to its portfolio in a bid to gather new customers and explore new markets.

    But Ovum analyst Mark Main said the report was surprising.

    “Given that eBay has no related presence in the online personal communications market, I don’t see immediate synergies through such a move,” he said.

    Earlier this year, the industry was abuzz after a British newspaper reported that Rupert Murdoch’s News Corp. had explored a $3 billion offer for Skype.

    Under new Skype services announced Thursday, companies that want to provide on-demand news services, weather or traffic updates or even language lessons could make the content available to Skype users who simply dial them for the services.
    © 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

    © 2005 MSNBC.com

    URL: http://www.msnbc.msn.com/id/9254351/

    "Can't buy what I want because it's free...
    Can't buy what I want because it's free..."
    -- Pearl Jam, from the single Corduroy

  • #2
    skype is an awesome program to use to make obnoxious prank phone calls.

    it comes up on caller IDs as 123456789.
    You're being fucking dramatic. You own a TV and an air mattress. That's not exactly what I'd call "a lot to lose."

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    • #3
      It's a done deal.

      Makes no sense for eBay to do this.

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      • #4
        Originally posted by pgrote@Sep 12 2005, 08:22 AM
        It's a done deal.

        Makes no sense for eBay to do this.
        Why not?

        It's a potential cash cow for e-bay, who has expanded their core business just about as far as they can go.

        Diversification is the only means of growth for them at this point....and skype could really be something HUGE.
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        • #5
          Originally posted by BringBackZezel@Sep 12 2005, 09:26 AM
          It's a potential cash cow for e-bay, who has expanded their core business just about as far as they can go.
          Did you see the price? 2.6b dollars.

          There's no way they'll make that back in sales through Skype or even eBay on this.

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          • #6
            Originally posted by pgrote+Sep 12 2005, 09:34 AM-->
            QUOTE(pgrote @ Sep 12 2005, 09:34 AM)

          • #7
            Originally posted by BringBackZezel@Sep 12 2005, 09:37 AM
            Skype has the potential to REPLACE all of the baby Bells....not just be a competetor.

            They can offer signifigantly lower prices than any local phone company.

            Skype is already well on the way from being a niche toy to being a legit force in telecommunications.

            We're not talking about e-bay simply recovering the $2.6 billion they spent....we're talking about them making more than that in profit off of Skype each quarter.
            It won't happen.

            If there is one things the lecs are famous for is allowing a competitor a foothold and then cutting their feet off.

            If Skype owned the pops and could handle the last mile that'd be great. Then they could do it. But until that point comes the lecs will still control everything. And don't forget the folks who have the internet backbones. It's pretty easy to identify VOIP traffic from a competing service and change the priority of the routing.

            I don't think eBay bought them as a pure play in a potential VOIP market. I think they bought them to augment their seller/buyer relationships, support and marketing. I could easily see them offering a Skype out pack to high sellers/buyers, etc.

            I guess the real benefit is that they can move the transactions for paying for Skype to Paypal. There they can really make money if the market for Skype expands.

            It's a 2.6b bet that probably won't pay off in pure VOIP, but they have a dog in the fight now. And it's not like eBay didn't have the cash.

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            • #8
              Originally posted by pgrote+Sep 12 2005, 09:52 AM-->
              QUOTE(pgrote @ Sep 12 2005, 09:52 AM)

            • #9
              Originally posted by BringBackZezel@Sep 12 2005, 10:07 AM
              The lecs are screwed by government regulations.
              Evidently, you've missed the last 12 months of government rollbacks on the rules governing open access, naked usage and resale of lines.

              The Bells are stronger than ever and will remain so unless the market shifts mostly to VOIP. Which in that case, the backbones become the key, which is where you run into the routing deal. That's why you'll see Bells by more backbone carries.

              Here's a good article that discusses the the potential threat at the network level.

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              • #10
                So should i buy stock in ebay?
                Are you on the list?

                Comment


                • #11
                  Originally posted by SLUBLUE@Sep 12 2005, 11:13 AM
                  So should i buy stock in ebay?
                  It's cheaper right now because of the merger.

                  This is a long term gamble, though. I don't know if I would recommend purchasing stock based on it.
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                  • #12
                    I never even heard of Skype until this...


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                    • #13
                      Originally posted by Nasty Nate@Sep 8 2005, 03:51 PM
                      skype is an awesome program to use to make obnoxious prank phone calls.

                      it comes up on caller IDs as 123456789.


                      I'll have to try that sometime...

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