Google acquires Gizmo5 to take on Skype. Deal valued at US$ 30 Million.
Google has been on the prowl acquiring some strategic companies in what could be termed as the next frontier. After acquring Admob, Techcrunch has reported that it is to acquire VOIP Start-up Gizmo5 for about USD 30 Million.
The deal comes after Skype successfully negotiated a deal with its former owners Niklas Zennstrom and Janus Friis, to maintain full possession of the technology it requires to operate.
Gizmo5, operated by Michael Robertson (of mp3.com fame), was reportedly in discussions with Skype about a potential acquisition should the company lose its legal battle with its former founders. But since that dela has gone through now, Skype no longer requires Gizmo5 as a potential back-up plan.
Google will now set itself up as a VOIP provider to rival Skype, which holds the vast majority of the market and accounts for 8% of all international voice traffic.
While Google already offers a feature for users to speak over the internet via Google Talk/Voice, it does not have the ability to make incoming or outbound calls to “real” telephones – a service Gizmo5 has already established. Interestingly, Gizmo5 has already been integrated with Google Voice, a service that replaces a user’s telephone numbers with a single number for all devices.
eBay to sell 65% of its stake in Skype for $2 billion
eBay has agreed to sell 65 per cent of its stake in Skype for $1.9 billion in cash and a note of $125 million to an investor group led by Silver Lake and participated by Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board. The company will retain 35 per cent stake in Skype.
The deal, which values the internet calling service at $2.75 billion, is expected to close in the fourth quarter of 2009. eBay had acquired Skype in 2005 by paying $3.1 billion to its founders Niklas Zennstrom and Janus Friis.
Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses,†John Donahoe, president and CEO, eBay, has said. As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.â€
In April 2009, eBay announced plans to separate Skype from the company, beginning with an IPO in 2010. The decision followed a year-long review of Skype within eBay’s portfolio. As it prepared for an IPO, the company said it would naturally consider bids for Skype that offered an attractive valuation. According to John Donahoe, the deal offered by the investor group achieved that.
This deal achieves our goal of delivering short- and long-term value to eBay and its stockholders, without the possible delays and market risk of an IPO,†Donahoe has said. Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company. And it allows us to focus all of our energies on the opportunities in front of PayPal and eBay.â€
In 2008, Skype generated revenues of $551 million, a 44 per cent increase compared to 2007. Total eBay revenues for 2008 were $8.5 billion. Registered Skype users reached 405 million by the end of 2008, a 47 per cent increase from 2007. Skype is claimed to attract hundreds of thousands of new users each week.
via Alootechie.
