Update: eBay To Acquire Skype; Deal Could Top $4B
eBay has announced that it plans to acquire VOIP powerhouse Skype Technologies for a whopping $2.6 billion in cash and stock.Auction site eBay said Monday that it plans to acquire VOIP powerhouse Skype Technologies SA for a whopping $2.6 billion in cash and stock. The deal, worth $1.3 billion in cash plus 32.4 million shares of eBay stock, will command a substantial premium, 42 times Skypes expected 2005 earnings of $60 million. Skype expects revenue to grow to $200 million in 2006. Additionally, eBay will pay up to 1.2 billion euros or $1.5 billion in additional performance-based considerations, which could boost the total worth of the deal to $4.1 billion.
The agreement, reported earlier, would add a significant services play for eBay. Company executives said Monday that they see VOIP as a natural extension between buyers and sellers, pushing the auction technology into new geographies as well as pay-per-call services.