Say what you will about Valleywag (just don’t get Mike Arrington started) but Owen Thomas is a pretty smart guy, and I think he makes a good point amidst all the sturm und drang about Facebook and its market value, and how eBay’s $1.4-billion Skype-related writedown could affect the perception of that value (for more on that, just see this Techmeme thread or the Times Online blog).

It’s true that eBay’s writedown says a lot about the risks of paying bubblicious prices for things, and a $10-billion valuation for Facebook has certainly got more than a whiff of bubble about it. At the same time, however, Owen points out that there are just as many risks in not buying things. eBay is a great example of that too, having tried and failed to buy PayPal early on. And Yahoo has a boatload of missed opportunities, including Google and Facebook.

As for Microsoft’s hyperactive basketball-coach CEO, Steve Ballmer, his remarks to the Times about Facebook being a “fad” are just as likely to be an exercise in talking down the value of something before you buy a chunk as they are a thoughtful commentary on the company’s actual value. Or it’s possible that he really doesn’t get it.

In the end, I think Kara Swisher at All Things D probably has the right read on the situation: Facebook is likely to take some money, at a handsome valuation, but remain independent (unless $10-billion gets dropped off at Mark Zuckerberg’s flat, of course). If nothing else, MySpace shows the downside of being acquired too early.

About the author

Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

5 Responses to “Microsoft fiddles while Facebook burns”
  1. Uch…everyone’s lost perspective. 500 Million is not downside.

    Let’s not forget (NORTEL ANYONE?) how companies can be worth a lot and then…not so much really. The polar ice caps could melt from global warming, send a huge tidal wave that then causes some new flu pandemic which sends the markets in to tail spins, and then, then what would facebook be worth i ask?

    Anyway, i digress. It’s the weather. My point is, 500 million is not downside.

  2. That’s a good point, Leigh — as usual :-)

  3. “Ingram: Microsoft risks being ‘a fad'”


  4. Good one, Jim :-)

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