The resignation of Skype co-founder Niklas Zennstrom recently, underscores the importance of managing the expectations of our various strategies.
It wasn't too long after the purchase of Skype by eBay (EBAY) that questions arose of how they were going to monetize the business. They still haven't figured it out in relationship to the huge $2.6 billion price they paid for it.
It's amazing to still see the hype of the digital age still make people and companies think they're going to be able to make extraordinary strides in spite of there being no known way of doing it.
While we are still hearing the endless hype in the social networking space, as well as online video, it remains to be seen if it will reach the type of expectations put upon it. You'd think the dotcom bomb would have caused people to start looking at things in a real way, but they continue to embrace expectations beyond reality, and pay far more than a property is worth.
Concerning the eBay fiasco with Skype, they are now writing off one-time charges of approximately $1.4 billion for the third quarter. They are also adopting a more realistic view of the value of Skype and its long-term prospects.
David Willis, an analyst at Gartner, said concerning the acquisition of Skype by eBay in September 2005, that it was "overpriced by any direct measure: technology value, user base and revenue. Skype now generates only $1.60 per subscriber per year. However, eBay was correct in its vision of interconnecting the worlds of business applications and communication capabilities."
The problem with any of us is if our expectations are beyond reality, not only will we consider what we do a failure, but it makes progress itself look like it's underperforming, and the cost of acquisitions and the amount of money put into something far more expensive.
The thing to learn is we need to manage our expectations in anything we endeavor to do in business or marketing. If we don't, like eBay, we'll end up paying far too much for far too little, as they did with Skype.
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