The Round-Up: 05.10.07

eBay has admitted it may have over-valued Skype just a teeny bit after it bought the company two years ago.

The auction website raised a few eyebrows when it announced it was buying the VoIP company for a whopping $2.6bn, and the Round-Up's not one to use the word 'whopping' lightly.

eBay has now announced a whopping $900m hit on its quarterly profits. An admission that they overestimated the business value of Skype a lot. The company said this week it will take an "impairment write-down" against the value of Skype - essentially a loss on its original investment.

When eBay bought Skype the value of the deal could have increased by another $1.6bn dependant on revenues meeting targets. The Round-Up's betting that $1.6bn is still safely locked in the auction site's lockers.

The Round-Up has to confess to have been baffled for some time at the strategic fit between the two companies. Auction website, VoIP company. There's not a natural fit but eBay must have seen something it liked.

At the time the world's favourite online bric-a-brac enabler said it saw great potential in using Skype's peer-to-peer voice over IP technology to connect buyers and sellers in the eBay marketplace. There were grand plans to integrate eBay's PayPal payment system with Skype's VoIP network. Those plans aren't so grand anymore and the vision's clearly gone a bit bleary.

Furthermore, given Skype's business model it was always a bit of an odd target for a mega bucks takeover. After all, if the company’s unique selling point was making phone calls for free over the internet, it's not hard to see that finding a revenue stream for the business was always going to be a bit tough. Other than charging - and then you're losing your USP of course.

As one silicon.com reader put it: "I use Skype, only because the calls are free and I'm online - if they are going to start charging for calls - then I'm not interested in using the service."

Quite.

Now it really seems as if eBay had bought into the Emperor's New Clothes and in retrospect $2.6bn is a lot of money to pay for some dangly bits.

Meanwhile, former Skype CEO and founder Niklas Zennström is devoting more time with partner and co-founder Janus Friis to internet television service Joost. No doubt funding the start-up with the whopping amount of money he got from selling his last business to eBay.

Meanwhile, eBay is still trying to convince itself that there's still something of value remaining in Skype.

A spokesman for eBay said: "We feel like we can do a lot more with Skype as a standalone VoIP provider," toying with the concept in the same way a 10-year-old toys with unwanted sprout on its plate before willing it to disappear beneath the mashed potato.

The eBay spokesman sighed and added he supposes the company is still focused on addressing desktop users but said it supposes it's also committed to putting the Skype application in the hands of its users on whatever device they're using.

'Whatever' being the operative word...

Cheery, cheeky popsters Radiohead have decided to make their new album available for download from their website and the band - no strangers to experimental howling musical adventures - have allowed fans to choose their own price for the album.

Said album, In Rainbows, is available for pre-order from the band's website and can be downloaded on 10 October.

When you click on the help icon next to the blank price field, you are presented with the message: "It's up to you."

If you click the help icon again, you get the message: "No really. It's up to you."

Radiohead assumes that you've got the message by now and doesn't give you any further help icons.

This will be Radiohead's tricky seventh album and the first since they ended their relationship with music giant EMI following the 2003 release of Hail to the Thief, which was actually pretty good in places, though admittedly not all.

Then again, fans could always cut out the middle man and simply strangle a cat in a metal dustbin, record it, sample it with some crashing drums and keyboards and - hey presto - some avant-garde, electronic melancholia.

Anyway, such is the popularity of the band and the offer that fans flocked to the website in such numbers that it was crushed under the traffic deluge like a sensitive young existential contemplating the ineluctable plight of man's solitude.

Once the site was up again, fans were able to learn that the band are also selling a boxed set of music and dreaded conceptual artwork, which can probably be found under the 'pretentious brain farts' section of your local music store.

Needless to say, it’s an interesting commercial departure for a band that has made its name in recent years on interesting musical departures. All things considered, it's not a terribly risky one for Radiohead who have made enough cash off the proceeds of their previous six albums to keep them stocked up on theremins and beer for life.

You can't quite see it working for a new, up and coming band. And besides Radiohead are actually courting record labels about releasing 'In Rainbows' on more traditional media sometime next year.

So in summary: a bit of experimentalism followed up by a stunning return to form. The marketing, that is. It may be a little too much to ask for the same thing in terms of the music itself.

Either way, the Round-Up's placed its order and, for the record (so to speak), it did pay a semi-respectable amount.

OK, computer?

Q. What do you get if you cross an iPhone with a third-party hack? A. A brick

OK, it's not a gag that will result in Accident & Emergency rooms around the country being inundated with people suffering from split sides but depending on which side of the iPhone popularity fence you reside you might find it either highly amusing or mind-bogglingly annoying.

Earlier this year, Apple announced AT&T would be the exclusive US carrier for the iPhone. Since they've been available people have been beavering away hacking the device to install third-party apps - Apple disappointed its developer community by making it a closed platform. Officially because any miscreant apps could bring down AT&T's entire network but really because Steve Jobs spent two and a half years designing it and it's perfect as it is, goddammit. Some clever hackers have also managed to get it running on other networks.

So everyone was happy, except Apple and AT&T. So this week a software upgrade installed on some iPhones resulted in devices with third-party apps installed being restored to factory defaults and those running on other networks reduced to mere inactive bricks. And very expensive ones at that.

There are two arguments to this camp. Let’s hanker down with a cup of cocoa and listen to the mentalists on either side explode with rage.

On the one hand you've just annoyed your customers and developer community by shutting out third-party apps. Irritating and slightly pointless. For some customers, the rage is more palpable as expensive phones bought by Mac fanatics and early adopters are reduced to mere paperweights. Apple has reportedly been less than sympathetic with complainants. 'Buy a new iPhone,' one person was apparently told. Some bright spark enraged with her brick has apparently filed a $1m lawsuit with the company. Good luck with that one. Failing that she could just lob it at Jobs.

On the other hand, Apple set its terms and conditions out in black and white. Mess with the iPhone's guts and you'll end up in the poo - and with no warranty. It's not exactly a deft touch to customer relationship management but there you go. It's Apple’s call, it seems.

While lawsuits are likely to fail, this is a PR minefield for Apple, following hot on the heels of the $200 iPhone price drop. It seems the company's goodwill is being constantly eroded, a dangerous trend for Cupertino, which is often perceived as being the alternative to the mainstream in consumers' minds and steeped in cool.

You may at least respect the zeal and verve with which Apple is prepared to deal with those who dare to veer away from its vision for personal communication technology. Alternatively, you may consider the company to be a draconian bully which fails to respect its early adopters and their hobbyist enthusiasm for its products.

Either way the Round-Up's guessing the iPod halo effect is increasingly becoming slightly tarnished...

Microsoft has taken the wraps off its newest innovation (albeit originally someone else's) and it seems it could prove to be more of a challenge to Apple's iPod and iPhone than the Zune, despite its recent re-launch (see Zune pictures here - and ask yourself, what could possibly have inspired the form factor of the little Zunes?)

Before you point out this is actually old news about the table, the Round-Up would like to point out that it realises that but thanks anyway. silicon.com covered the story at the time but now we have loads of pictures of the snazzy device which you can peruse to your heart's content using the link at the end of this bit.

The Microsoft Surface table uses multi-touch technology powered by Windows Vista, which has so far consistently failed to set the world alight (see this and this and this). It allows you to manipulate media and applications using your fingertips.

The technology comes at a steep price though: the device will cost up to $10,000. So far, only a couple of hotel chains and casinos have expressed an interest.

The best take on the table (at least as far as the Round-Up is concerned) is featured in a YouTube spoof ad, called 'Big Ass Table From Microsoft'.

Over a demo of the device being used by dreamy top marketing demographic type people, the voiceover purrs: "One day your computer will be a big ass table with pictures of other people’s kids all over it. Instead of actually playing with your kids, you can just look at videos of them playing by themselves. And you only paid $10,000 to do it."

The video adds: "Instead of using one of today's more popular compact devices to get directions to where you're going, why not use a device the size of a small car to do the same job?"

A serious challenger to the iPhone and GPS-enabled smart phones? You can decide here by checking out the pictures.

Alternatively, you can view the YouTube 'ad' here.

It's the future, you know? And you don't need coasters...

Finally this week, silicon.com has won the coveted prize of 'Editorial Team of the Year - Business' at the Association of Online Publishers (AOP) annual awards.

The AOP is a unit of the Periodical Publishers Association and it gathered more than two dozen judges who commended the silicon.com team for keeping "a specifically targeted and demanding professional group up-to-date, stimulated and connected". Pretty saucy, eh? The award could not have been won without the constant feedback and suggestions we get from you, the readership, so thanks and pats on the back all round.

You can find out more about the award here.

You'll now have to excuse the Round-Up. It's off to join the rest of the team in firing an inordinate amount of champagne corks at each other and kicking the weekend off in style.

Until next week, take a moment to pit your wits against fellow readers in the latest Caption Competition. The prize, appropriately enough, is a bottle of fizzy stuff.

If you want some more Round-Up goodness, sit back and enjoy the Weekly Round-Up podcast available here or available for subscription from iTunes.

POP!!