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Nov. 26, 2007

A rumor that Google might possibly acquire Skype has now started and that rumor has taken on a life of its own at some Wall Street investment firms.

Of course there is no solid basis for any such speculation. However, it persists because there are a few logical explanations for the two companies to establish some form of synergy.

Guardian blogger Jemima Kiss writes "currently in favor around London's Internet community is the rumor that Google has been in negotiations to acquire Skype for some time. The search giant bases all of its mobile projects in London, so this would of course be the fitting place for such a rumor to begin."

Overall, a Google-Skype merger would make sense on some levels because the two companies have teamed up on some major issues.

For example, the two companies partnered with some other Internet companies in making a $21.7 million investment in Fon, a Spanish firm that promotes the spread of its Wi-Fi "foneros" (Internet users who share Wi-Fi access points with each other).

Also, the two companies' philosophies are pretty much aligned in the upcoming 700 MHz FCC wireless auction. Both companies fully support the "open" measures inherent in the FCC auction and are happy to abide by the rules.

Overall, with several million users online at any given time, Skype is the largest of a sizable wave of VoIP companies utilizing the Internet to send free or inexpensive phone calls, usually over international borders.

However, will a merger or an acquisition involving Skype and Google ever happen? Asked to comment on the rumor, Skype said it doesn't comment on rumors... (!)

Kiss, another blogger wrote "a Google acquisition of VoIP specialist Skype, a unit of eBay, makes a lot of sense on a number of levels, particularly because it fits with Google's ambitions for disrupting the mobile industry through its new open mobile phone development platform Android."

He added "for eBay, it makes sense too, since the company recently was forced to admit that it had paid too much for Skype."

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Source: E.E. Times