EBay buys ‘Net phone provider

STOCKHOLM, Sweden — Online auctioneer eBay Inc. agreed Monday to pay at least $2.6 billion in cash and stock for Internet phone provider Skype Technologies SA, confounding many analysts who questioned the lofty price tag and the companies’ compatibility.

The total value of the deal may climb to $4.1 billion based on whether Skype meets a series of performance targets over the next three years, San Jose, Calif.-based eBay said. It said the acquisition would create “an unparalleled e-commerce and communications engine” for Internet users worldwide.

Low-cost Internet phone providers like Skype are creating upheaval in the telecommunications industry. That’s because Voice over Internet Protocol technology, or VoIP, breaks calls into data packets that get routed over the Internet, which is much more efficient and cheaper than the traditional circuit-switched phone system.

Skype — founded by the creators of Kazaa, the free music-sharing program that riled the music business — gives away software lets people talk for free over the Internet using computers and microphones. A paid version, SkypeOut, allows those calls to be connected to regular phones.

Other big Internet names have expanded their VoIP capabilities lately, including Google Inc., which rolled out a new instant-messaging program with voice service. Last month Microsoft Corp. acquired Teleo Inc., a small startup whose software lets people make calls from computers to traditional telephones.

But some analysts have been skeptical about eBay’s need to own a VoIP provider.

EBay buyers and sellers can communicate with each other via e-mail before a transaction is complete — eBay says about 5 million such messages are exchanged daily. Adding Skype and its voice capabilities will speed the communication between parties and increase the level of trust, said Meg Whitman, eBay’s chief executive.

“It’s instantaneous and private,” she said. “You don’t have the person’s phone number, just a user name, so it protects the privacy of all users.”

She also said Skype would help eBay open “several new lines of business.”

“Communications is at the heart of e-commerce and community,” said Whitman, who had won praise for avoiding deals beyond eBay’s core, marketplace-based strategy, especially during the late 1990s Internet craze.