failed business model 1

1. eBay buys Skype for $3.1 Billion

2. Last week eBay offloads what it can of Skype, after its value had been written down by $1.4 Billion.

A classic case of two dot.com and social media based business giants failing to monetise the technology.

Other failed web 2.0 deals =
News Corp has halfed the value of Myspace since it purchased it
AOL is looking to sell Bebo already
CBS has recently had to accept a significant write down in the value of Last.fm since it purchased it less than two years ago
Perhaps the worst of all - ITV sell Friends Reunited for $25 Million after buying it for $175 Million.

If these social media tools head real or even potential business benefits their values should be soaring as bandwidths improve phenomenally and the online population expands at an exponential rate. But instead they decrease at frightening speed. There can be three possible reasons:
1. the leaders of these web 2.0 businesses are incompetent
2. the users and potential users leaders of these SM tools fail to utilise them to full social or economic advantage and therefor are unwilling to pay for them
3. the value of these SM tools beyond simply speeding up communication and enabling more people to create more noise is seriously limited.

Of course there are other reasons and explanations and I am massively simplifying the arguments here but the above sets the bar well for now beginning to consider the positive and potential successful application by business of SM tools.