Last month, Microsoft bought San Francisco's Teleo Inc., an Internet telephone company, to enhance its communications services. 'We can't think of any better platform to fulfill this vision to become the voice of the Internet than with eBay and PayPal.'ĮBay's acquisition follows moves by other online companies making inroads into the Internet telephony space. 'Our vision for Skype has always been to build the world's largest communications business and revolutionize the ease with which people can communicate through the Internet,' said Niklas Zennstrom, Skype CEO and co-founder. While only an eighth of Skype users are from North America, it is still the leading Internet telephone company in the United States, something the company hopes to build upon. It is expected to generate an estimated $60 million in revenue in 2005 and $200 million in revenue in 2006. Skype, which reported $7 million in revenue in 2004, has yet to turn a profit. Users are charged a small fee for connections to regular phones. Skype users can download software for making free computer-based, high-quality calls. It has about 54 million users around the world and is adding about 150,000 a day.

Since its founding in 2002, Skype has emerged as one of the fastest-growing companies on the Internet. 'By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.' 'Communications is at the heart of e-commerce and community,' said Meg Whitman, president and CEO of eBay. ANALYSIS / Speak directly into the screen / Internet merchants.

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