eBay/Skype split

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Sad to see the ill-fated marriage of eBay and Skype end in divorce. Though it’s more fun to celebrate strategy triumphs, disasters can offer important lessons too. An Economist article focuses on the sale itself and worries about eBay’s prospects, but doesn’t assess why the original strategy didn’t work. At its most basic, it was a common issue – over-optimism about how business A customers would form a strong and easily-captured potential customer-base for business B. [I made the same mistake myself in the past!]  Take a look at eBay’s presentation of the rationale offered at the time of the orginal acquisition – it’s scarily thin on any analytical justification for the hoped-for benefits. Investors should expect better.

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