London - Ebay today announced that it will purchase VoIP company Skype in a deal valued between $2.6 and $4.1 billion. The acquisition will allow the online auction leader to access Skype's 54 million users and further diversify its revenue streams with Skype's VoIP services - while free PC-to-PC-based calls will continue to be offered.

Skype, barely two years old, did not come cheap for Ebay. The online auction house pays $2.6 billion in cash and stock - roughly 371 times the revenue Skype achieved in 2004 - plus a performance-based bonus, which could amount to $1.5 billion and will be due in 2008 to 2009 time frame.

Despite the substantial investment, analysts believe that Skype will pay off for Ebay and create the dominating global VoIP provider on the Internet. "The foremost benefit for Ebay clearly is to add a voice client to its services and diversify its revenue with an excellent and strong product," said William Stofega, an analyst with IDC. "Ebay purchased an enormous worldwide brand that comes with a wonderful ecosystem already built. Besides that, the company receives a proprietary technology that does not rely on SIP, but on its own signaling protocols."

This news article was written on September 13, 2005, quoting Tom's Hardware.