eBay Reaches for Skype

eBay (EBAY Quote) said Monday it will acquire Internet phone company Skype for cash and stock worth $2.6 billion. The agreement has earn-out provisions that could take the price as high as $4.1 billion over time, the companies said.

"By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net," said eBay CEO Meg Whitman in a statement.

On Thursday, reports that the online auction giant was in talks over a multibillion-dollar deal for Skype sent eBay's shares down 3% as Wall Street gave a thumbs-down on the possible pairing.

(For a bullish read on the Skype acquisition, click here.) ...