Skype joins the list of "Worst Billion Dollar Acquisitions of All Time"

eBay says they will take more than $1 Billion dollars in write downs on their purchase of Skype. Henry Blodget says it is more like $1.4 Billion. They also announced that Skype founder CEO Niklas Zennstrom is leaving. This is the worst kept secret in the industry. He has been working on other projects for quite a while.

I wrote a post "The 10 Worst Billion Dollar Internet Acquisitions of All Time" Skype didn't make the list at the time because it was too early to tell. Not anymore. It takes a spot very high up on the list. AOL, Lycos, and Excite are still the clear leaders in this dubious category.

There are several other candidates for the worst acquisitions of all time that are still too early to call...but the trends look pretty clear. What are your picks for possible additions to the list? Remember, it has to be at least a billion dollar blunder or it doesn't count.

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Comments

[Bob]

I think you're leaving Skype for dead a bit prematurely. True, eBay is taking the writedown, but is it doing so for tax purposes? Given Skype's growth, is this really a diminished asset ala AOL or just a clever accounting move?

[brian]

Facebook when Microsoft buys it for $13 billion and then takes a $12 billion impairment charge in 2009.

[Don Dodge]

Skype isn't dead. Neither is AOL. But, eBay paid $2.6B up front and another $530 million in earnouts for a total of $3.1B. They just took a write down of $1.4B...that is Billion with a B. Meaning, Skype is now on the books for $1.7B. We could see another huge write down in the future. Time will tell.

Facebook is a private company and its valuation is very hard to estimate. Steve Ballmer has said before that Facebook and MySpace could just be a fad.

No doubt it is popular now, but how much valuation should you give to $150M to $200M of revenue? And will those revenues still be there 5 years from now, or is it a fad? Again, time will tell.

[Don Jones]

I guess the Skype guys have been a little too busy with the venture capital outfit, Atomico...