Information Age: News, analysis & insight for IT & business leaders

Online auction giant eBay bought Internet phone service provider Skype Technologies for $2.6 billion in cash and stock. The surprise acquisition scooped the business from under the nose of Rupert Murdoch's News Corp and ended months of speculation over who would acquire the company, after Yahoo! and Google had also expressed interest. The price surprised analysts: the free phone service has 54 million users but only 2 million pay for extra services and it has never made a profit.

Software maker Oracle reached an agreement to acquire long-term target Siebel Systems for $5.85 billion. Oracle first revealed its desire to buy its customer relationship management rival in 2004, during court proceedings surrounding its protracted $10.3 billion acquisition of business applications rival PeopleSoft. Both purchases are seen as attempts to gain market share from applications leader SAP. A former Wall Street darling, Siebel's shareholders had pressed executives either to sell the company or buy back shares, as licence revenues continued to fall.

Telecommunications giant BT finally launched the business unit it was forced to create to give competitors fair access to its local networks. Regulator Ofcom had threatened to break up BT if it did not unbundle its stranglehold on the 'local loop'. BT Openreach will become operational in January 2006, and will help its competitors gain access to the 'last mile' of lines that connect homes and businesses to BT exchanges.

Two European airlines pressed regulators to allow them to enable in-flight mobile phone calling. British carrier BMI and TAP Air Portugal want to trial mobiles on board their aircraft in 2006 and insist they can minimise the disturbance to other passengers by restricting the service to text-only at certain 'quiet times' during the flight.

Analyst group Heavy Reading reported that the world's largest telecommunication providers are accelerating plans to offer Internet telephony services due to fears of losing revenues. They expect half of the voice traffic they carry to go over the Internet by 2007, up from less than 10% today.

Handheld computer manufacturer Palm ended years of competition with Microsoft by unveiling a new smartphone running the Windows Mobile operating system. Palm and Microsoft have a common rival in RIM, manufacturer of the BlackBerry. Competition from the mobile email device has contributed to Palm's poor financial performance, particularly in Europe. Despite spinning out its software division, PalmSource, in 2003, the Palm Treo 700w will be its first device running another company's operating system.

Microsoft .unveiled further modifications to its controversial software licensing programme, in an attempt to counteract continuing uncertainty felt by its users. Microsoft said it will add unlimited web support and 10 days of free planning and consultancy on upgrades and migrations for customers that sign up to its Software Assurance plan, which allows users to receive any upgrade released during the lifetime of their contract.