Overhype

by Mike Masnick




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.

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  1. identicon
    Fred, 24 Jul 2006 @ 7:25pm

    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...

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