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eBay Buys Skype

eBay has announced that it will acquire the company behind the popular Skype Internet-calling application for $2.6 billion in cash and stock. The deal could cost the company an additional $1.5 billion in 2008 or 2009 in performance-based incentives. eBay is buying the company, along with its 52 million users, to increase its offerings. Skype is considered one of the fastest-growing online communities, with an estimated 2 million people using its technology to make PC-based calls at any given time. Users can make calls to other Skype users as well as low-cost calls to regular telephones and cell phones. It's an odd, expensive purchase for a company mostly known for its auction Web site and PayPal payment service. eBay says the purchase will make it easier for buyers and sellers to communicate and will open several new lines of business for the company. Skype has been the poster child for the emergence of Voice over Internet Protocol (VoIP) technology, which is expected to change the landscape of the telephone industry. Voice technology has become increasingly important to online portals, such as Yahoo!, Google, and MSN. Both Microsoft and Yahoo purchased companies earlier this year to improve voice technology in their services. Google recently introduced a new instant messaging (IM) client called Google Talk that includes voice technology.

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