“When a company is acquired, the price paid is usually higher than what the company is worth,” Horace Dediu writes for asymco.
“For example, when looking at Skype through Microsoft’s eyes, they could be valuing it for its resources (employees, management team, customers, or intellectual property),” Dediu writes. “Or they could be valuing its processes (how it makes software and how it recruits customers) or it could be its business model (viral distribution, very low prices with wide distribution, plan to disrupt telecommunications). Each of these is a separate, mutually exclusive deal with separate integration plan and separate strategic justification. Each is targeting a separate Skype.”
Dediu writes, “Chances are that Microsoft paid for Skype’s customers and engineers but will not apply the innovations of viral peer-to-peer distribution or disruptive voice pricing. If that happens then perhaps Microsoft will pay $8.5 billion for the wrong Skype and telecom disruption will find another home.”
Read more in the full article here.
MacDailyNews Take: We all know that Ballmer bought Skype in a vain attempt shift the attention of shareholders and the tech/business press onto anything other than the ass-kicking being administered to Microsoft by Apple and those who attempt to imitate Apple. Next, he’ll try to buy Nokia’s phone biz or RIM and he’ll Kin them, too.