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<nettime> Nicolas Carr: Skype and the madness of management teams
geert lovink on Sat, 6 Oct 2007 07:54:57 +0200 (CEST)


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<nettime> Nicolas Carr: Skype and the madness of management teams


(Nicolas Carr remains my favorite 'net critic' that emerged well 
outside of nettime circles and the academic-cultural universe. Lately 
he has been less, like many bloggers, perhaps because he is finishing a 
book. What I like about writings like this is the way in which the web 
2.0 is cooled down and put in perspective. /Geert)

http://www.roughtype.com/index.php

Nicolas Carr: Skype and the madness of management teams

The definition of the verb to skype has officially been expanded: 
"skype (v): 1. to make a free telephone call over the internet. 2. to 
seduce a large company into making a reckless investment in the 
irrational hope of a payoff in the indeterminate future."

There have been many postmortems on eBay's confession that it was 
skyped by Skype. But the best explanation can be found in Meg Whitman's 
own premortem from more than a year ago. Asked whether eBay would 
succeed in "monetizing" Skype, the hardnosed chief executive provided 
this remarkably fanciful answer:

Well I certainly hope we?re gonna be able to monetize it! ... If you 
have the largest ecosystem, then you will be the one who will actually 
figure out the long-term monetization model ... And we already have 
some ideas; there?s already a number of trials in place ... And so, 
that?s why we were so excited when we saw Skype because I said, you 
know what, there?s something here that will unlock the Skype business 
... So, people will understand as we deliver the results, and you know, 
I have great confidence that this was a smart thing to do ... So, we?ll 
see.

So, we've seen.

Up to now, the excitement over Web 2.0 has failed to stir much interest 
among the investing public. In stark contrast to the dotcom bubble, 
ordinary people are not rushing to throw their savings into the new 
Silicon Valley startups (although they may be happily using their 
services). The crowd is, for the time being anyway, behaving 
rationally. It has not convinced (or deluded) itself that giving stuff 
away over the Net is a path to big profits, no matter how many ads a 
company slaps on its pages. The tech companies that have managed to 
capture the investing public's imagination recently - Google, 
Salesforce.com, VMware - are businesses that actually charge other 
businesses for their goods or services. "Free" is a great model for 
corporate inputs; it's less great when it comes to the outputs.

If madness exists anywhere this time, it is inside upper management 
teams like eBay's, which have managed to convince themselves, under the 
influence of hype and hope, that buying eyeballs - or in Skype's case, 
eardrums - is itself a strategy. "If you have the largest ecosystem, 
then you will be the one who will actually figure out the long-term 
monetization model." Translation: If we buy it, the money will come. 
Or: If we don't buy it, the money will go to one of our competitors.

Top executives are paid extravagant sums to act as rational stewards, 
but they are as flawed as the rest of us. Boardrooms are not immune to 
extraordinary delusions.

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