eBay in Talks for Skype: Reports

eBay (EBAY Quote) is in talks to buy Luxembourg-based Internet-phone service company Skype Technologies, according to published reports Thursday.

The Internet auctioneer would pay $2 billion to $3 billion for Skype, The Wall Street Journal reported, citing people with knowledge of talks between the two sides. The New York Post reported that eBay is set to pay about $5 billion for Skype.

Skype was created by Niklas Zennstrom and Janus Friis, the founders of file-sharing service KaZaA.

The business of offering phone service over the Internet has been in the headlines lately as tech heavyweights Microsoft (MSFT Quote), Yahoo! (YHOO Quote) and Google (GOOG Quote) have started vying for dominance.

Google for instance rolled out Google Talk, an instant-messenger calling service, last month. Also last month, Microsoft bought Teleo, a company with technology that lets users make phone calls over the Internet.

In a 2003 interview with Cnet News.com, Friis said the name Skype doesn't mean anything. "It just sounds good, and the dot-com domain name was available," he said at the time. "We hope people will start saying, 'I'll Skype you' instead of 'I'll call you,' which means 'I'll call you without paying any rip-off per-minute charges and with superior better-than-phone quality.'"

Shares of eBay were down $1.30, or 3%, to $39.16 in premarket trading.