Online auction site eBay has agreed to buy internet telephone company Skype Technologies in a $2.6bn (£1.4bn) deal. eBay said it would pay half the amount in cash and the other half in stocks to create "an unparalleled e-commerce and communications engine". Skype's software lets PC users talk to each other for free and make cut-price calls to mobiles and landlines. Other players in the online phone market include computer giants such as Google, Microsoft, AOL and Yahoo. Google recently launched its Talk service, while Microsoft purchased leading player Teleo for an undisclosed sum. Technology used by Skype, and rivals such as Vonage, converts phone conversations into packets of data and transmits them down the same wires used to surf the internet. If certain performance targets are met, eBay said it would pay an additional $1.5bn to Skype over the next three years , bringing the total size of the deal to $4bn. "Communications is at the heart of e-commerce and community," eBay chief executive Meg Whitman was quoted as saying by the BBC. Using Voice over Internet Protocol (VoIP) services, computer users can talk to each other via a headset or microphone and speakers.
