...until a few months ago, Ebay was the largest internet pure play business around. At around $55 billion in market cap Ebay is three times the size of Amazon and significantly larger than Yahoo. Now, all of a sudden here comes Google and before Whitman could even blink it races past Ebay to reach over $80 billion in market cap. Now that Google is poised to launch an online payment mechanism, possibly threatening Paypal (even though Google denies they would compete) - it makes eBay all the more insecure.
This was when everyone thought the deal was to integrate Skype in the auction business and wondered whether there is any synergy between the two companies. Now Wall Street Journal reports that Ebay is talking to Yahoo and Microsoft (both arch rivals of Google) on how to combat the growing threat from Google.
"After years of working closely with the search giant, eBay last year became alarmed as Google started assaulting its turf in multiple ways," the report said, including creation of a competing classified advertising service.
Reuters: Ebay in talks to fend off Google threat: report
My original post: Ebay Wants to Buy Skype? Makes Sense
Follow up posts on Ebay-Skype deal:
Skype Valuation: Why it Deserves to be High
Why Ebay Bought Skype
Skype's Revenues and The VoIP Opportunity