The story of Skype and eBay

The story of Skype and eBay

Skype is one of those small companies, which have managed to create history, and it remains to be seen whether they can outlast and outclass their competitors, which now interestingly include the big giant of the internet Google. It is a small company and employees around 200 workers. And they have been reportedly been tried to be overtaken by a lot of companies, a list which includes the granddaddy of the e-commerce eBay.

Why eBay would be interested in Skype is not a tough question to answer. It has seen a phenomenal growth in the market they developed for themselves. They made VoIP cool and enabled users on the internet to talk to each other. Skype offer a free application, which let users communicate through voice over the internet. The free application has brought them more than 50 million users, a number which is increasing as we speak.

The revenue model is tough and the company now has on offer paid for services allowing users to ‘call’ regular phones through their computers. The company has showcased that VoIP is a possibility and it can somewhat replace the traditional telecom systems in the future. This technology removes the complex and expensive requirement of running a telecom infrastructure by using internet as its backbone.

The problem with the news of eBay interested in Skype is the figures circulating in the market for the acquisition. The news sources claim that the price can be as high as 2-3 billion US dollars, which sounds a hell lot of money for what Skype is. There is no way eBay can use the Skype technologies to recover that money. However, sources close to eBay suggests that the company is looking at expanding into alternative areas on the internet to stay competitive.

And Skype is just going to be just another extension of that plan. However, at USD 2-3 Billion dollar, they will not be impressing their shareholders.