Ebay is considering selling Skype, its subsidiary VoIP business according to Financial Times. The other day, Manjunath(my classmate) was giving his class presentation on Skype detailing its advantages and disadvantages. Albeit Skype was so popular in the VoIP area, owing its success to the way it can circumvent firewalls and its P2P way of VoIP, I still did not see a reason why an auction company like eBay would buy it. (I am into the M&A stuff deeply after my term paper titled "Mergers and Acquisitions in the Software Industry & its aftermath" this month, so bare with me ).  So, eventually , in the Q&A session , I asked him why does he think eBay might have bought Skype and that too for a whopping $3.1bn. I meant that eBay was going great guns even without the "Call User" function. It may be a conglomerate acquisition, one for entering other markets by other established companies in the markets, but I didn’t get the business advantage Skype would give to eBay users. His ingenious answer was "for business". But my incertitude mind haunted me until I found the financial times article Digg’ed. Well, It might be just another classic case of M&As often failing to add significantly to the value of the acquiring firm’s shares and business.

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