EBay blew it with Skype?

[yesthattom]

When EBay bought Skype most people responded, “Why?” but I responded, “I don’t care, just as long as they don’t fuck it up.”

“EBay revises its ambitions for Skype” (NYT, Oct 2): “EBay is finally acknowledging that it paid too much for the Internet phone company Skype two years ago. On Monday, eBay, based in San Jose, Calif., said it was taking a $1.43 billion charge related to the acquisition of Skype. EBay paid $2.6 billion for the rapidly growing service in 2005.”

http://www.nytimes.com/2007/10/02/technology/02ebay.html?ref=technology

Of course, I had the same reaction when Nokia announced they bought map and navigational software maker Navteq today. But... what could possibly go wrong with that?

Comments

[airshipjones.livejournal.com]

So, are we seeing the beginning of a correcting like the real estate market is going through?

[sierra-nevada.livejournal.com]

According to the studies I've seen reported in The Economist and elsewhere, most M&A deals are destructive of shareholder value, i.e. only good for the people selling out.

[yesthattom.livejournal.com]

I'd like to bug the classrooms at an MBA school so that on the day that the professor tells them that mergers are a good idea I can run in and yell, "No they aren't! No no no no no!"

It's like when friends that are totally dysfunctional announce they're getting engaged because, "Everything will be so much better when we're married." Uhh... no it won't.

[gravitrue.livejournal.com]

Yeah, except that like marriage, sometimes M&A is a good idea. I'd guess that the largest, most profitable companies have all done it successfully. Even ebay, a pretty dumb company, was probably smart to have bought paypal. Most businesses fail, that doesn't make it inherently dumb to start one, it just means it's a high risk operation, and that a lot of people go into it naive.