Monday, September 12, 2005

More web buyups

Well over the last week News Corp picked the IGN network up for $650m and eBay grabbed Skype for a rather tasty $2.6bn. You really do have to wonder about these prices, I do understand that both companies have established business models but realistically I’m going to be surprised if either company makes money out these deals. It reminds me of the sort of prices that were going around in the late 90’s.

eBay might come out ok if skype manages to become a viable replacement to standard telephony and nobody else offers the service at a more competitive price. One has to worry about how an auction site (who’s only other major business is paypal) actually intents to make good on a phone company, especially given that have to go up against the three web giants in Yahoo, Google and Microsoft.

IGN on the other hand really is verging on the insane, this works out at something like $9 per unique visitor to the network. Most people running news/informational websites would be happy making $0.20 a visitor, and that’s before taking into account any overheads such as bandwidth or employing writers. Not to mention the massive conflict of interest in the company that owns FOX now also owning rotten tomato, gamespy and IGN itself, all of which review and comment on FOX products. The integrity and unbiased quality of these sites really is one of their main selling points, one has to wonder for happy fox will be when it’s next summer blockbuster, worth $100m+ to the company, is sitting in the rotten section on rotten tomato.

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