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Story URL: http://www.silicon.com/research/specialreports/voip/0,3800004463,39152058,00.htm

eBay to buy Skype?
Auction giant said to be making a bid

By Reuters

Published: Thursday 08 September 2005

eBay is in talks to acquire net phone company Skype for between $2bn and $3bn, The Wall Street Journal reported on Thursday.

Citing people familiar with the matter, the newspaper said the deal would represent a dramatic shift in strategy for the world's largest online auction site.

The talks are at a sensitive stage and could fall apart, according to one person briefed on the matter, the WSJ said.

An eBay spokesman declined to comment and Skype representatives could not be reached for comment, the newspaper said.

Luxembourg-based Skype, whose software allows consumers to make free telephone calls around the world over the internet, has been in discussions with other technology companies but none has led to a deal.

As its core business matures, eBay is searching for new product categories and international markets, the report noted. The company has made a string of acquisitions and investments over the last year and a half to enter markets such as rental-property listings, online classified-ad listings and comparison shopping.

The WSJ's source said eBay was keen on adding services that make it easier to buy and sell goods online, as it did when it acquired the electronic-payment processing service PayPal in 2002.

The San Jose, California-based company is also interested in entering new businesses that could open up ways for the company to generate revenue, such as pay-per-call internet telephony, the newspaper report said.