The big story today in the world of technology (or M&A, depending on how you look at it), originally reported in the Wall Street Journal, is that eBay is in talks to buy Skype for, get this, $3 to $5 billion (yes billion). Seems like anything but a match made in heaven to me. Mark Evans agrees:

eBay purchasing online auctions houses overseas makes sense as do moves into new areas such as online rental listings. But spending $3-billion to buy Skype puzzles me. If anyone can explain eBay’s strategic thinking, I’m open to be educated. For investors, eBay’s interest in Skype could be an alarming indication management is concerned about the growth prospects for the auction business, which may explain why eBay shares have fallen today.

Skhype!

Skype has become quite the media whore as of late, with rumored suitors in the last couple months including Yahoo, Microsoft, Google, News Corporation, and InterActive. Yahoo, Microsoft and Google balked at the purchase price, no doubt because they could build their own competitor for far less. Talks with the other two didn’t amount to anything.

Skype is horribly over-priced:

Om Malik has a post citing a Swedish newspaper that suggests Skype has annual sales of about $70 million. Doing a little quick math suggests a $2-billion to $3-billion purchase would give Skype a price to revenue multiple of 30 to 45 times.

And even more importantly, I can’t see how Skype and eBay result in any synergies. They are completely different businesses, and I don’t think eBay needs a communication network to grow. Furthermore, adding Skype to it’s portfolio may only create new headaches for eBay, who had to jump through hoops at times to get PayPal where it is today. Dealing with financial regulators is one thing; dealing with communications regulators is quite another.

What about Amazon.com?

So the question then, is what does Amazon.com do if the rumored eBay-Skype marriage turns out to be true? Surely there’d be some pressure on them to make a move, as their primary competitor these days is most definitely eBay.

One scenario: partner up with Google in a real hurry. eBay would have both PayPal and Skype under it’s wing, so it might make sense for Amazon.com to try and get in bed with Google and it’s Google Talk and Google Wallet (rumored) services. The other advantage for Amazon in this scenario is that it could happen very quickly, as opposed to building their own systems. On the other hand, Google is a competitor of Amazon’s already with Froogle and Amazon’s A9.

Another scenario would have Amazon build their own communications system, perhaps using Jabber. I don’t think Amazon sees itself as a development company so it would be a bit out of character, but if Google can do it, why not Amazon right? This scenario would depend very heavily on whether Amazon sees any advantage to having such a communications system. I would imagine they are scratching their heads a little right now about eBay and Skype too.

Any other ideas? It will be interesting to watch this one unfold!