EBay & Skype Bubbling?

Skype for $2-3B? You don't say...

September 8, 2005

1 Min Read
EBay & Skype Bubbling?

7:00 AM -- The Wall Street Journal is reporting today, with some caveats, that EBay Inc. (Nasdaq: EBAY) is in talks to acquire Skype Technologies SA for two to three billion dollars.

"The talks are in a sensitive stage and could fall apart, according to one person briefed on the matter," reports the Journal, which is journalese for "the board could decide the price tag is completely nuts."

Here at Light Ranting, this smells a bit like 1999 (see Is Skype Worth $3B?). What's it all mean? Is Skype -- a company selling a product that's essentially free -- wildly overvalued, or is it just that EBay sees its stock as good currency (and thus overvalued itself)?

Well, we did kind of predict this mania for VOIP services, however wacky it may be (see Telecom Superstore). If the deal happens, it is driven by EBay's thirst for growth. It is purely a marketing deal -- EBay needs new customers. If they need to pay $2 billion to $3 billion, you have to ask, might they be getting a bit desperate?

— R. Scott Raynovich, US Editor, Light Reading

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