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From Good Morning Silicon Valley…

Today, in what will undoubtedly be a blow to the Skype founders’ seller rating, eBay finally acknowledged that its bid for the VoIP firm may have been a tad overenthusiastic and that whatever expectations it had were not being met. EBay announced that in the quarter just ended, it will take $1.4 billion in write-offs and charges related to the Skype acquisition. About $530 million will go to former Skype shareholders to help them forget about those additional performance-based payouts. And eBay will write off about $900 million in Skype-related “goodwill” to more accurately reflect the acquisition’s value. And just in case the message wasn’t clear, Skype co-founder Niklas Zennstrom was eased out of the CEO’s office and given the non-executive chairman’s seat at the Skype board table.

Wow!

That still leaves open the question of what eBay ought to do with its tarnished toy, and Henry Blodget has an answer: sell it to someone who could put it to use, like Yahoo, Microsoft or Google.

This morning’s Observer column…

To the old question: what are friends for? we must now add: how much are they worth? This is topical because rumours abound that Microsoft is contemplating buying a stake in Facebook, the social networking site. The really interesting bit is the arithmetic. Microsoft is supposedly contemplating paying between $300m (£147m) and $500m for a 5 per cent share. If true, this suggests that its advisers put a value of between $6bn and $10bn on Facebook. Google is also reported to be sniffing around, raising the prospect of a bidding war for a website which essentially enables people to post embarrassing photographs and impress acquaintances with accounts of their busy lives…

I know the iPhone looks like a cute gadget, but this is ridiculous. Good Morning Silicon Valley has been reading the vapourings of stock-market ‘analysts’ who are ostensibly employed to give detached advice to investors. It’s an embarrassing spectacle. “This goes beyond smart phones and should be given its own category called ‘brilliant’ phones,” said Tim Bajarin, principal analyst with Creative Strategies. “The iPhone is the most beautiful and functional phone I have ever seen,” writes Jupiter analyst Michael Gartenberg. ” First time I held it, I was speechless for more than a few seconds.” At Bank of America Equity Research, Apple analyst Keith Bachman was slightly more judicious. “We believe [the iPhone] is a major evolutionary step, given that it has effectively eliminated keyboard keys and plastic input keys and is using a touch interface with software as its strength,” he wrote in a research note to clients. “Apple indicated that they expect to sell 10 million units in calendar year 2008. … Given the nature of the device as well as the ‘wow factor,’ we believe that the number sounds low.”

Oh come on, guys. Your supposed to put your brains into gear before advising clients. The iPhone looks good, but there are some awkward questions. GMSV picks up a few — for example:

How resilient is the iPhone’s screen? Is it more scratch resistant than those of its iPod predecessors; can it stand up to real-life use?

When the iPhone arrives in June, it will support only EDGE, the “poor man’s” data transmission technology. When will it support 3G?

Given past issues with the iPod’s “unreplaceable battery”, why does the iPhone feature a built-in battery? Who the hell wants to send their phone back to Apple Service every time it needs a new battery?

How robust is the mobile version of OS X?

And finally, there are the omissions — some of them glaring: No expandable memory. No support for WiFi syncing to your PC?

Can I toss in a few more?

The New York Times today has a story claiming that Mark Zuckerberg, the 22-year-old founder of Facebook.com, turned down a $750 million offer for the company from Viacom last January, and is now being offered $900 million by Yahoo.

To woo Mr. Zuckerberg, Yahoo has offered about $900 million for Facebook and says it will keep the company somewhat independent, with Mr. Zuckerberg in charge. This has been its model with other acquisitions like Flickr, a photo-sharing site, and Del.icio.us, a social bookmarking service that lets members share lists of their favorite Web sites.

“A lot of people say there are problems with having a 22-year-old C.E.O., but one thing that is good about it is that he doesn’t remember the boom and the bust that followed,” said an adviser to Facebook. “That has distorted the thinking of a lot of people. If they have a good product or service, they sell way too early and they don’t stick with it.”

The adviser spoke on the condition of anonymity because of the sensitivity of continuing negotiations.

Mr. Zuckerberg, through a spokeswoman, declined to comment on any potential acquisition offers.

Money, at least so far, does not seem to draw him. He lives in a barren apartment in Palo Alto, Calif., a short walk from Facebook’s office. He only bought a stereo recently at the request of his girlfriend.

“Mark is the kind of guy you worry needs to get other things in his life,” said David Sze, a partner with Greylock Partners, one of Facebook’s venture capital investors.

Google’s CEO, Eric Schmidt, has a cod piece in the Financial Times (now hidden behind that organ’s annoying paywall) about how the Internet — and Google — has changed all our lives for the better. Nick Carr is having none of it.

As Schmidt writes, “the democratization of information has empowered us all as individuals.” Today - for the first time ever! - people “are actually commenting on events themselves.” It is nothing less than “the liberation of end users.”

As a liberated end user myself, let me just say that this is a load of crap. Schmidt goes on in his op-ed to argue against governmental controls over the internet and, in particular, over access to the internet through cell phones. Those are worthy arguments. But why does he find it necessary to distort history, insult the intelligence of pretty much everyone, and demean the work of all traditional journalists before he gets around to making his point? Why does he feel compelled to repaint the past in the darkest possible colors? I guess it’s to create an illusion of perfect progress, a new liberation mythology.

Shares in Google rose $13.24 to $290.51 in afternoon trading on the Nasdaq. Any bets on when it hits $400? And to think of those Wall Street types who thought it was over-valued at $85!

The New York Times | Worldcom verdict

Bernard J. Ebbers, the former chief executive of WorldCom, was found guilty yesterday in federal court of orchestrating a record $11 billion fraud that came to symbolize the telecommunications bubble of the 1990’s and the excesses that were uncovered in its aftermath.

Mr. Ebbers was convicted of securities fraud, conspiracy and seven counts of filing false reports with regulators. Each count carries a sentence of 5 or 10 years.

Mr. Ebbers and WorldCom, through the acquisition of dozens of phone companies, helped to create the rush for telecommunications stocks in the 1990’s. They were at the center of a swirl of scandals that cast doubt on corporate accounting methods, the role of Wall Street analysts, and investment bankers who sold stocks and bonds to investors.

Note: during the trial, Bernie maintained that he didn’t understand all the accounting mumbo-jumbo. He was, it seems, just a regular guy at the mercy of sharp-witted accountants.

Five years ago today the NASDAQ peaked. Nice piece in Guardian Online looking back at the bubble.