Things Behind The eBay Deal

I couldn’t have read more braindead deal than Skype for $2.1 billion. Obviously Skype isn’t worth that much (so far it has got investments of under $21M). One could have built much more feature rich, customized software for 1000 times less money than that. What about future? Wouldn’t Skype have revenues of zillion dollars in 2010? No, it won’t. Biggies like Microsoft and Yahoo are already coming up with similar software with far deeper reach than Skype could ever imagine to have. Plus cable companies are throwing away entire need for computer and microphones and have very soon plans to dial from regular phone and route it through Internet. So why executives at eBay would decide to through away half of their cash in deal that needs everyone to take microscope to find what’s so good about it? There are many deals like that have happened in past where people just can’t find justification and had just has to go with the aura of the buyer. My guess is that big heads in eBay is going to get, somehow someway, huge cuts in this deal. The thing is that when company has $4B floating in their bank account, its not easy for executives to get it simply transfered in their bank accounts. So you go out, cut the deal to buy $2000 car for $200,000, have seller spend $188,000 on things you liked but which you couldn’t have directly spent by yourself. And meanwhile, cross your fingers to have journalists think you are a smart guy and have them keep discussing that there must be something super cool in that car that a visionary like you can see but dumbass journalists like us can’t. I meant those journalists which your PR department haven’t bought out, yet.

Shital Shah

A program trying to understand what it’s computing.

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