[cmdkeen]

Skype is / was not "a chat tool" - Skype was an opportunity to own the IP telephony space for both the business and consumer markets. That is potentially a huge revenue base, and fits neatly into a company like Microsoft that sits astride both.

Solaris, Java, SPARC and MySQL had all demonstrated that they weren't going to acquire major revenue streams, at least under the ownership of Sun. Their valuations reflect two different types of company, something the market is very able to understand.

[Bartweiss]

Skype is basically the Type I error offsetting "passed on Google" style Type II errors. It's a crappy investment in retrospect, but it was a strong player in an obviously valuable market. IP telephony remains enormously valuable - Skype just didn't win the contest.

And ironically, a shortage of "core CS" was a major factor in that failure. Usable, high-fidelity, encrypted VOIP is an enormously difficult challenge, and after some early successes Skype failed to offer a quality product. Claiming the valuation as an argument that core CS doesn't matter looks pretty backwards to me.

[michaelmrose]

The fact that it wasn't going to win the contest ought to have been obvious to anyone who actually used skype.

Their android app was a horror story. There desktop app was ho hum, chat reminded me of icq and it was completely obvious that the major players were going to be people who had hip social networks or were well positioned like say google with all android users and apple with all iphone users.

Skype was a tool to talk to grandma and I didn't forget the fact that they tied the number of people in a group chat to less than 10 if you didn't use an intel processor and resolution to buying a logitech camera.

Turns out even grandma has a facebook account now in fact she had one when lunatics decided it was a good idea to buy skype.