EBay Moves in on Skype

12 September 2005

Online auction house eBay is reported to be close to inking a $2.6 billion (€2.09bn; £1.41bn) deal to buy internet telephone service Skype.

The deal between the San Jose, California-headquartered auctioneer and the Luxembourg-based Voice over Internet Protocol (VoIP) service could grow to around $4.1bn if Skype meets certain targets. It would be the biggest acquisition so far for 10-year-old eBay.

The auction house would use its purchase to help its sellers and buyers complete transactions. Users currently communicate with each other via e-mail.

Skype was launched about two years ago by the European duo that created the controversial file-trading software Kazaa. It now claims more than 50 million registered users and has caused much wringing of hands among telecoms rivals.

Neither side has commented on the deal but an announcement is expected imminently.

Data sourced from Financial Times online; additional content by WARC staff