On and off over the last couple of years, as Skype, YouTube, and more recently, Facebook, got tagged with silly sums, and I've been having the occasional flashback to bubble-land circa 1999. The hype, the parties, and that good old frothy feeling. Ah, the memories.
Well, in case you hadn't noticed, eBay suffered "an impairment write-down" recently. In my opinion, Meg Whitman must have been impaired back in 2005 when she judged $2.6 billion to be a good deal for Skype. Skype is a great, disruptive, and revolutionary technology precisely because it doesn't extract much money from its users and it points the way to a time when communication will cost the consumer nothing at all. In the words of its co-founder Niklas Zennstrom, "We want to make as little money as possible per user."
So it should come as no surprise that eBay said it would take a $1.4 billion charge last week. Just to get all the bad news out of the way in one fell swoop, eBay probably should have taken the kitchen sink approach and added on another billion or so to that number. eBay's board must be pondering the value of Ms. Whitman these days.
Well one thing is for sure, Mr. Zennstrom and friends look like some pretty smart folks at this point. And I can't help thinking about those YouTube guys too - I loved the "press release" video they put up with respect to the ten figure number applied to their project. Those guys appeared so clearly stupefied and dumbfounded by the shear insanity of the valuation obtained. I couldn't help laughing with them.
In Google's defense though, I suppose if I could print Google dollars I too would probably be willing to pay just about anything to get what I wanted. I wouldn't, however, say the same thing with respect to Microsoft. eBay started the post-bubble bubble with Skype. I wonder how it will play out.