This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

eBay Makes a Land Grab in Voice Over Internet

Editor's Note: This is a bonus story from James Altucher, whose commentary usually appears only on RealMoney , where it was published at 1 p.m. EDT Thursday. We're offering it today to readers. To read Altucher's commentary regularly, please click here for information about a free trial to RealMoney.

According to The Wall Street Journal and the New York Post this morning, eBay (EBAY - Get Report) is in talks to buy Skype, a voice-over-Internet protocol (VoIP) telephony company, and the price could be as high as $5 billion. Skype has been in talks before, supposedly with News Corp. (NWS - Get Report) for $3 billion, but nothing has ever worked out. This, to me, represents a dramatic shift in eBay's strategy and an interesting evolutionary step in the Internet world.

eBay's last major acquisition, its purchase of PayPal, directly facilitated the service it offers on its auction site. Although companies often pay lip service to the word "synergy" when making an acquisition, it's hard to think of a more synergistic play than an auction site buying a company that makes purchasing easier.

Buying Skype, however, would be the first purchase by eBay that opens up an entirely new revenue stream -- pay-per-call Internet telephony. Similarly, Microsoft (MSFT - Get Report) last week bought Teleo, a small player in VoIP, and Google (GOOG - Get Report), with its new Google Talk service, allows a degree of telephony, albeit only at the computer-to-computer level right now. With Google and Microsoft, however, there are more synergies through which people can use their phone to conduct searches, play games and use other services offered by both companies.

What's clear is that while the major telcos are continuing to consolidate while they deal with billions of dollars in debt, the fast-growing, great balance sheet Internet companies are making a land grab on VoIP. Small-cap companies that might rise in response include 8X8 (EGHT - Get Report), Net2Phone (NTOP), deltathree (DDDC) and IDT (IDT - Get Report), which is in the process of buying Net2Phone.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
DDDC $0.01 0.00%
EGHT $7.84 0.00%
EBAY $27.25 0.00%
GOOG $630.38 0.00%
IDT $15.86 0.00%


Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs