YouTube Tries On The Skype Billion Dollar Buyout Plan For Size

from the hype-hype-hype dept

A year ago, we were amazed at how Skype’s founders and investors more or less manipulated the press into claiming the company (which had made very little money) was worth $1 billion, then $3 billion just a short while later, only to end up at $4.1 billion only a couple months later. The numbers are hard to justify no matter how you look at it, but press hype (fed eagerly by the investors) worked like a charm until someone coughed up that huge amount. Earlier this year, it looked like Facebook was trying the same strategy — except they started at $2 billion, despite the fact that their larger competitor, MySpace, was bought only a few months earlier for $580 million. It appears that $2 billion may have been a bit too high to start in this game. $1 billion works much better. So, almost exactly a year after Skype first pulled their $1 billion number out of a hat, here comes the press claiming that YouTube (with barely any revenue and huge bandwidth bills) is now worth $1 billion. How long will it be until we see that number jump higher and higher until someone drastically overpays? Perhaps instead of starting new businesses (that compete with YouTube), Skype’s founders should just consult other hot startups on how to maximize the insanity right before selling out.


Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “YouTube Tries On The Skype Billion Dollar Buyout Plan For Size”

Subscribe: RSS Leave a comment
19 Comments
John (user link) says:

1/2 a billion would be too much

That’s just silly. I was just at their site last night and I stopped looking at the videos for a moment and wondered “how are they making money here?” I left thinking, well it’s simple, they are not.

Eye balls alone does not = revenue. They have huge bandwidth bills and even if it was filled with ads, they wouldn’t get much for them as there would be so few clicks.

Even Google doesn’t want their AdWords ads on MySpace… neither does Yahoo want their ads. Way too many ads to serve up and simply too few clicks.

sean says:

Re: 1/2 a billion would be too much

Agreed. As one that one that manages Interactive Marketing with Internet as one of many channels it leaves you wondering. On the other hand you can see how companies are saving money sending links off their own site to pull from videos on youtube.com saving the company that should pay bandwidth alot of cash.

sean says:

Re: 1/2 a billion would be too much

Agreed. As one that one that manages Interactive Marketing with Internet as one of many channels it leaves you wondering. On the other hand you can see how companies are saving money sending links off their own site to pull from videos on youtube.com saving the company that should pay bandwidth alot of cash.

Fred says:

Offering content with no direction

These content providers do not have any direction. they host content for the massess, with little or no segmentation. They let users segment themselves by allowing them to chose what they want to see.

Their contracts with web analytics providers like coremetrics and omniture are huge (those companies charge based on page views)… they employ people to look at these massive amounts of statistics and segmentations opportunities. Yet, they do nothing with it.

MySpace, for example, with it’s 58 million users, allows one to insert date of birth, location, schools attended, jobs, personal interests, gender, zipcode, general interests, books, movies, etc… they have SOOOOO much information on a person, yet, they still offer silly ads for personals, and for MySpace parties in Denver, Colorado (I’m in NY and my profile says “IN A RELATIONSHIP”….. you idiots!!!!!)

So, their potential is great, indeed. But they do nothing with it. Potential is worth something, yes, but even after MySpace was bought out, nothing has happened…

Anonymous Coward says:

Re: One word... pro

I agree this might be the way to go. A lot of software companies offer a free version (say Zonealarm for example) and then later offer a “pro” version with more content. Once the user base is large enough and the content sufficient to meet the demand, there will certainly be people willing to pay for premium content (say if Kevin Smith wanted to offer a sneak peek of Clerks II for example). I’ve seen videos that have gotten hundreds of thousands or even millions of views that I’m sure people would be willing to pay a small monthly fee to be able to access (although given how the music and entertainment industry work they’d find a model that assures nobody would participate if left in their hands).

Faceless says:

Owners?

To re: One word..pro,

Kevin Smith does not have the rights to distribute his films in such a manner, MGM does as it paid for that exclusive right. Furthermore, cinema owners would not pick up a film that had a “sneak preview” on the web as it underminds their ability to screen the film on the big screen.

It’s amazing that people who are supposedly are Digital Media mavens, don’t realize how content production and distribution works in the real world. There’s a very entrenched production/distribution/exhibition chain that will take a long time to fully disrupt. It’s not going to happen in 6 months over YouTube.

Don’t believe the hype.

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...