Anyone who’s ever used eBay knows how easy it is to get caught up in a bidding frenzy and end up winning by over-bidding and wonder “what the heck happened”?

Perhaps this explains eBay’s purchase of Skype which several weeks later still doesn’t make any sense to us. To put it in perspective, let’s compare it to Oracle’s purchase of Siebel which was announced around the same time. Siebel has 5,000 employees and more than a billion dollars in annual sales. For only $1.5 billion less (or $2.8 billion less if Skype’s performance benchmarks are not met) eBay gets a company that has a free piece of software and a questionable longterm revenue model.

Using this metric Independent Sources is worth…well, we’re not for sale.

technorati:  ebay skype

This entry was posted on Tuesday, October 4th, 2005 at 10:59 am by Insider and is filed under How Not To Succeed In Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.