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 TheStreet.com 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) 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) 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) last week bought Teleo, a small player in VoIP, and Google (GOOG), 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), Net2Phone (NTOP), deltathree (DDDC) and IDT (IDT), which is in the process of buying Net2Phone.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV