Microsoft fiddles while Facebook burns


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.

Comments (5)

  1. Leigh wrote::

    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.

    Tuesday, October 2, 2007 at 4:42 pm #
  2. Mathew wrote::

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

    Tuesday, October 2, 2007 at 4:46 pm #
  3. Rob Hyndman wrote::

    “Ingram: Microsoft risks being ‘a fad'”


    Tuesday, October 2, 2007 at 5:33 pm #
  4. Jim Turner wrote::

    Okay this is just scary.

    Good minds think alike.

    Wednesday, October 3, 2007 at 1:15 pm #
  5. Mathew wrote::

    Good one, Jim :-)

    Wednesday, October 3, 2007 at 1:33 pm #