Ebay’s announcement: will they really buy Skype? THEY DID!

I have been reading about it for quite some time now. But will Ebay really buy Skype? And that too at close to 4 billion USD? Via Businessweek:

Just got a notice from eBay of an “investor conference call” at 5 a.m. Pacific time, on an announcement to be made two hours earlier. Very unusual practice for eBay. I don’t know for sure, but who wouldn’t guess that eBay’s buying Skype after all? A Financial Times story suggests that’s indeed the case, and mentions that the “agreement could reach $4.1bn if performance targets are reached.” Yikes. Honestly, I still don’t see the logic at anything near that price, but it could be we’ll find out shortly what eBay has up its sleeve.

Now, I see the value of Skype more in terms of the members they have and not on the technology. There are a lot of other players in the VOIP space but who would have imagined a VOIP company being acquired for 4 billion USD or even a discussion about it? I am wondering how is Ebay going to use both the data (Ebay members and Skype members) and come up with something that lets them even recover this cost? Right now – I am just not in a position to think after I read the $4.1 billion figure. How come the acquisition price for Skype keeps going up every other day?

Update: It’s official. Ebay did buy Skype at $4.1 billion. They’re paying $1.3 billion in cash, $1.3 billion in stock and apparently there’s another $1.5 billion on the line in incentive payouts based on various performance metrics over the next three years. News from Skype website:

(Nasdaq: EBAY; http://www.ebay.com) has agreed to acquire Luxembourg-based Skype Technologies SA, the global Internet communications company, for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration. The acquisition will strengthen eBay’s global marketplace and payments platform, while opening several new lines of business and creating significant new monetization opportunities for the company. The deal also represents a major opportunity for Skype to advance its leadership in Internet voice communications and offer people worldwide new ways to communicate in a global online era. Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.

I can only say – “Long live Ebay”!