Facebook Is The New Skype

02 October 2007

Caveat emptor. Word is that Microsoft (MSFT) may buy 5% of social network Facebook for as much as $500 million. And, rumor is that Google may outbid it.

Ebay just wrote off about $1.4 billion of the $2.6 billion that it paid for VoIP company Skype. At the time of the purchase, Skype had about 50 million registered users. By some measurements, that number is now over 220 million.

Skype never became a big business from a financial standpoint because users were not willing to pay money for add-ons to their free VoIP service. Having tens of millions of users meant very little to the ultimate value of the company.