Online auction house eBay has agreed to buy Internet telephone firm Skype Technologies for $2.6 billion, a source said today.
EBay plans initially to pay $1.3 billion in cash and $1.3 billion in stock and to make a further payout of up to $1.5 billion by 2008 or 2009 if financial targets are met, giving the deal a total value of up to $4.1 billion, the source said.
Spokesmen for eBay and Skype declined to comment.
The eBay investor relations website contains a notice of a conference call scheduled to be held at 1 pm Irish time today, but provided no details on the nature of the Webcast.
Skype, whose software allows consumers to make free or low-cost phone calls anywhere in the world via the Internet, would be the biggest acquisition so far for 10-year-old eBay.
It tops the $1.5 billion eBay paid in 2002 for PayPal, which thrust eBay into the lead in the online-payment market. This year PayPal is on track to become a $1 billion business.
Skype, which is based in Luxembourg, offers a free service when calling other Skype users. Charges apply when Skype users connect to traditional telephones.
In just two years, Skype has attracted 54 million members to its free web-based calling service. At current growth rates, it could double in size again within roughly a year.