Way
out from left field, the Wall St. Journal is reporting eBay Inc.
is in talks to acquire Skype for $2-billion to $3-billion. The idea is
that eBay's auction business is maturing and it is using
acquisitions to move into new markets. eBay purchasing online auctions
houses overseas makes sense as do moves into new areas such as online rental
listings. But spending $3-billion to buy Skype puzzles me. If anyone can
explain eBay's strategic thinking, I'm open to be educated. For
investors, eBay's interest in Skype could be an alarming indication management is
concerned about the growth prospects for the auction business, which may explain why eBay shares have fallen today. Now before anyone gets too excited about the WSJ story, it's also important to remember Skype's clearly in play given it has hired Morgan Stanley to explore its options. Part of the process is speculation by various interested parties to spur interest. If these people are successful, suddenly the idea of Skype being worth $2-billion to $3-billion becomes not only plausible but realistic. Don't be too surprised to read more stories about how Yahoo or AOL or Google or Microsoft or Barry Diller are "in discussions" to acquire Skype. The game is on and it's only a matter of time before Skype makes Niklas Zennsom, Janus Friss, Draper Fisher Jurvetson, Index Ventures, Bessemer Venture Partners and Mangrove Capital Partners very, very rich.
Russell Shaw thinks an eBay-Skype marriage is a good idea to generate more revenue by getting eBay customers to use other Web-based services. Andy Abramson is on board too, while VOIP Magazine's Bryan Richard thinks it makes no sense. Fred Wilson, who thinks Skype is a bargain at $2-billion to $3-billion, doesn't see the synergies of an eBay deal, although he'd like to buy some Skype IPO shares.
Addendum: Om Malik has a post citing a Swedish newspaper that suggests Skype has annual sales of about $70 million. Doing a little quick math suggests a $2-billion to $3-billion purchase would give Skype a price to revenue multiple of 30 to 45 times.