eBay – Skype and Google -YouTube: Lessons to learn

There has been enough talkedabout eBay’s $1 Billion writedown of Skype. Multiple perspectives have been provided by various experts.

Here’s the top 3 things I took away from this:
1. Google has the patience for the business model to be formed Ebay DOES NOT. There is a possible business model for Skype (which BTW is making $300+ Million annually), beyond the simple Skype Out and Skype In. But, eBay’s management team is too short sighted (read quarterly numbers driven) to have the patience to focus enough energy, time and effort on it. While many analystsand every other so called expert has been clamouring on about  how Google’s YouTube acquisition is working out, there’s no sense of impatience from Google.

2. Google has time on its side, eBay does not. There’s a high growth business that’s rising all the other boats. eBay does not have that luxury. Its core business are in much lower growth modes.

3. The value of NOT providing wall street with guidance is more apparent here.
I was pleased to see both Google Transit’s graduation and YouTube’s announcement that U of Calwill be putting their lectures on the video site. As Google thinks – I have a new product.

How are you going to make money? Dont know and right now dont care. Maybe YouTube will start to charge users who want the lectures online and share 60% of that revenue with U of Cal (who are getting something for nothing at all. Or maybe the transit authorities will pay Google to put their routes by default and offer their users 20% off. Transit authorities get more passengers and Users benefit with the discount. Google makes money either ways.

Google does not care because they have no reason to worry about Q3 numbers or Q4 guidance. EBay does.

What do you think?

Update (9/6): Paul Monica discusses Google / YouTube a year later at CNNFN. Some relevant notes:

Despite YouTube’s formidable market share lead over other established
online video sites such as Metacafe, Break.com, Heavy and Dailymotion,
even more challengers have cropped up to battle YouTube, many focusing
on niche interests. Will Ferrell has contributed his talents to online
comedy site FunnyorDie.com while Harry Shearer of “This is Spinal Tap!” and “The Simpsons” fame is a main creative force behind MyDamnChannel. There’s even a YouTube-esque site for the more pious online video viewer called GodTube.

Online video advertising is still a tiny fraction of the overall ad market but it is expected to grow at a healthy clip the next few years.

Still, one problem for advertisers is that while the explosion of
online video has created a vast amount of content, much of it has
little, if any potential value to them.

“The business models in online video are currently
upside down. It’s a terrible business to be in right now,” said Ashwin
Navin, co-founder and president of BitTorrent, a company that runs a popular peer-to-peer file sharing service for videos and other content.

He said that unless more online video companies
adopt peer-to-peer networks like his to reduce bandwidth costs, online
video will be “unprofitable for many publishers.”