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Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
eBay's Takeover of Skype : The Strategic Fit
Publication Year : 2005
Authors: Nusrat Jahan Maldar, Sumit Kumar Chaudhuri
Industry: Internet Auctions
Region: USA
Case Code: MAA0054
Teaching Note: Available
Structured Assignment: Available
OR
Abstract:
Niklas Zennstrom and Janus Friis emerged from obscurity and became Internet legends after creating KaZaA, an illegal on-line file-sharing programme. After selling KaZaA, Zennstrom and Friis, embarked on their next project, an Internet telephony programme called Skype. Unlike KaZaA, Skype was legal, but as KaZaA had rattled the music industry, Skype's revolutionary business model was expected to threaten the traditional models of the giant telecom companies. Internet heavyweights, Microsoft, Yahoo! and Google, were said to be negotiating with Zennstrom and Friis to acquire Skype. On September 12 th 2005, eBay acquired Skype for $2.6 billion.
Pedagogical Objectives:
- To highlight the evolution of Skype and its acquisition by eBay
- To discuss the potential synergies that eBay might gain from the acquisition and the problems it might encounter in the course of a successful integration with Skype.
Keywords : Mergers,Acquisitions,Alliances Case Study;Niklas Zennstrom; Janus Friis; KaZaA; Skype; Low cost business model; eBay; PayPal wallet; Strategic fit; Competitive advantage; Competition; Synergies; Copyrights; Lead generation; Word of mouth marketing; On-line file sharing
