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Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
eBay: Rethinking Skype
Publication Year : 2008
Authors: Dileep R.Warrier, Lekha Ravi
Industry: Online Auctioneering
Region: Global
Case Code: MAA0177C
Teaching Note: Available
Structured Assignment: Available
OR
Abstract:
eBay, the online auction giant as part of its expansion strategy, acquired Skype; a popular communication platform for $2.6 billion. eBay’s CEO Meg Whitman had expected the acquisition to enhance their business. However eBay found itself facing a phase of diminishing returns and had to write down Skype by $900 million. The case explores the rationale behind eBay’s purchase of Skype. It also analyses why the synergies of the deal did not materialize as expected. The case study highlights the unrealised synergies of the acquisition.
Pedagogical Objectives:
- To comprehend the dynamics of online business
- To grasp the concept of unrelated product diversification
- To analyse how an integration strategy is vital for online businesses.
Keywords : eBay; Skype; PayPal; Mergers,Acquisitions,Alliances Case Studies; Unrelated product diversification; Positioning; Internet based businesses; Acquisition; Integration; Synergies; Online Business
