eBay in Talks to Buy Skype

By Ed Oswald, BetaNews

September 8, 2005, 12:11 PM

Skype appears to be looking for a suitor, although it does not seem to be having much success. The company had been in talks with several firms including News Corp, however the VoIP provider's search may end with an unlikely buyer: eBay.

The Wall Street Journal reported on Thursday that talks are in the formative stages for a $2-3 billion takeover of Skype by eBay.

The move would mark a major strategy shift for the ten-year-old company and a dramatic departure from past acquisitions. However, with its stock price stagnant for much of the past year, eBay is looking for ways to restart growth as its core business matures.

A source familiar with the situation said that the company would use Skype to enhance its listings much like it already has with PayPal. For example, an interested buyer could call the seller to ask questions about the item, or vice versa.

Also, Skype could open up new methods of generating revenue for the company. eBay has long maintained that it would make acquisitions that would allow it to grow its share of the e-commerce pie, and would consider new ways of doing so.

However, in the end it appears that the acquisition of Skype would mainly be used to benefit eBay's core business of online auctions.

Neither Skype nor eBay were commenting on the talks.