How Skype Hype And A Game Of Telephone Morphs Millions Into Billions

from the fact-check,-please! dept

You know the children’s game of “telephone,” where kids sit in a line and the first one whispers something to the next one, who is supposed to whisper it to the next kid on down the line until the end — when whatever has been said has inevitably changed? Skype may be a type of telephone system, but it seems that some reporters have been playing a game of “telephone” with reports about the company’s revenue. We’ve discussed the ridiculous levels of Skype-hype (Skhype) before, where we noted that the common consensus was that the company was making $6 million to $10 million in revenue, which made it difficult to justify valuations of $1 billion or $3 billion. That original estimate of revenue came from a ZDNet blog post — where they credit the estimate to Bambi (Francisco, we assume). However, in a Skhype fueled game of “telephone” it looks like that number has ballooned. The same day, an article written by CNET (ZDNet’s parent) claimed that Skype was making $6 to $10 billion. The comments on that article, as well as around the blogosphere pointed out that this seemed way off — and clearly the reporters had flipped the “m” for the “b”. People make mistakes though, so it seemed likely that the next time this came up, it would be corrected. Apparently not. One of the reporters from the original article has written up another article about how Skype is teaming up with Intel where the $6 to $10 billion number is thrown out again — a month after it was pointed out that this was almost definitely incorrect. In the article, the author, Michael Singer, credits “analysts” — so it would be nice to know who these analysts are. In the meantime, is it really any wonder that the hype is so high when reporters who have been told they’ve made a very big mistake concerning a company’s revenue repeat it a month later? Update: Wow. This just gets worse. CNET has posted a correction — but they get the correction wrong. Now they’re saying that the $6 to $10 billion (still with the “b”) is an estimate of Skype’s valuation! The absolute highest number anyone was saying before this, and which most people agreed was insane, was $3 billion. In fact, Skype’s number have come further into question, so, if anything, the potential valuation has been going down. Can you really call it a correction if you get the correction wrong too?

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