eBay to buy Skype for up to $4.1B

eBay confirmed rumors today that it plans to buy Skype for $2.6 billion plus an additional $1.5 billion by 2008 or 2009 if financial goals are met. The initial payment includes $1.3 billion in cash and $1.3 billion in stock. The Financial Times reports that News Corp. and Yahoo were among other potential suitors of Skype, the free VoIP service that claims 54 million members. Skype expects $60 million in revenue this year and more than $200 million in 2006, making it the market leader despite growing competition from Yahoo, Google, and Microsoft.

Some insiders see the deal as a departure for eBay, while others compare it to eBay's 2002 acquisition of PayPal, a division that is expected to top $1 billion in sales this year. Others say Skype's name recognition and existing infrastructure are not worth the hefty price tag, leaving many to wonder why eBay didn't just build their own VoIP service or buy cheaper.

For more on the eBay, Skype deal:
- check out this article from RedNova

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