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> However the market does't care for that. The market prefers short term gains over long term gains. I agree with this. For example, Sun was sold for $5.6B in

> However the market does't care for that. The market prefers short term gains over long term gains. I agree with this. For example, Sun was sold for $5.6B in 2009. [1] While Skype was sold for $8.5B in 2011 [2]. Sun had Solaris, Java, SPARC, and MySQL. Skype was a chat tool. Even today many popular databases find it hard to get billion-dollar valuations, while multiple Social Companies has done it. The market doesn't care about core CS. It cares about monetary gains. [1] https://en.wikipedia.org/wiki/Sun_acquisition_by_Oracle https://en.wikipedia.org/wiki/Sun_acquisition_by_Oracle [2] https://en.wikipedia.org/wiki/Skype https://en.wikipedia.org/wiki/Skype

cmdkeen 9y ago
Skype is / was not "a chat tool" - Skype was an opportunity to own the IP telephony space for both the business and consumer markets. That is potentially a huge revenue base, and fits neatly into a company like Microsoft that sits astride both. Solaris, Java, SPARC and MySQL had all demonstrated that they weren't going to acquire major revenue streams, at least under the ownership of Sun. Their valuations reflect two different types of company, something the market is very able to understand.
- Bartweiss 9y ago
  Skype is basically the Type I error offsetting "passed on Google" style Type II errors. It's a crappy investment in retrospect, but it was a strong player in an obviously valuable market. IP telephony remains enormously valuable - Skype just didn't win the contest. And ironically, a shortage of "core CS" was a major factor in that failure. Usable, high-fidelity, encrypted VOIP is an enormously difficult challenge, and after some early successes Skype failed to offer a quality product. Claiming the valuation as an argument that core CS doesn't matter looks pretty backwards to me.
  - michaelmrose 9y ago
    The fact that it wasn't going to win the contest ought to have been obvious to anyone who actually used skype. Their android app was a horror story. There desktop app was ho hum, chat reminded me of icq and it was completely obvious that the major players were going to be people who had hip social networks or were well positioned like say google with all android users and apple with all iphone users. Skype was a tool to talk to grandma and I didn't forget the fact that they tied the number of people in a group chat to less than 10 if you didn't use an intel processor and resolution to buying a logitech camera. Turns out even grandma has a facebook account now in fact she had one when lunatics decided it was a good idea to buy skype.
golergka 9y ago
> Skype was a chat tool. > The market doesn't care about core CS. Yeah, implementing a peer-to-peer voice over IP with Skype's late 00s quality (which fell significantly since then) is not "core CS" and is just "plumbing", right.
- Bartweiss 9y ago
  Skype seems to have floundered not on lack of features, but on app stability and call quality. Honestly, it looks to me like an example of a technically-challenging product that failed by underperforming on core CS. I'm not sure why it would be framed as low-difficulty, except that consumer-facing tools tend to get written off as simple.
jihadjihad 9y ago
The issue I have with this view is that unless you have people on your team with fundamental, "core CS" capability, creating a behemoth like Skype or Snap just isn't possible. Of course, there's a balance, and who knows, maybe it's Pareto with 80% of the team focused on engineering and 20% focused on math/CS/R&D. The monetary gains the market sees are the direct result of clever math and CS, not bolt-on solutions that can be lifted from libraries on GitHub.

cmdkeen 9y ago

Skype is / was not "a chat tool" - Skype was an opportunity to own the IP telephony space for both the business and consumer markets. That is potentially a huge revenue base, and fits neatly into a company like Microsoft that sits astride both. Solaris, Java, SPARC and MySQL had all demonstrated that they weren't going to acquire major revenue streams, at least under the ownership of Sun. Their valuations reflect two different types of company, something the market is very able to understand.

Bartweiss 9y ago
Skype is basically the Type I error offsetting "passed on Google" style Type II errors. It's a crappy investment in retrospect, but it was a strong player in an obviously valuable market. IP telephony remains enormously valuable - Skype just didn't win the contest. And ironically, a shortage of "core CS" was a major factor in that failure. Usable, high-fidelity, encrypted VOIP is an enormously difficult challenge, and after some early successes Skype failed to offer a quality product. Claiming the valuation as an argument that core CS doesn't matter looks pretty backwards to me.
- michaelmrose 9y ago
  The fact that it wasn't going to win the contest ought to have been obvious to anyone who actually used skype. Their android app was a horror story. There desktop app was ho hum, chat reminded me of icq and it was completely obvious that the major players were going to be people who had hip social networks or were well positioned like say google with all android users and apple with all iphone users. Skype was a tool to talk to grandma and I didn't forget the fact that they tied the number of people in a group chat to less than 10 if you didn't use an intel processor and resolution to buying a logitech camera. Turns out even grandma has a facebook account now in fact she had one when lunatics decided it was a good idea to buy skype.

golergka 9y ago

> Skype was a chat tool. > The market doesn't care about core CS. Yeah, implementing a peer-to-peer voice over IP with Skype's late 00s quality (which fell significantly since then) is not "core CS" and is just "plumbing", right.

Bartweiss 9y ago
Skype seems to have floundered not on lack of features, but on app stability and call quality. Honestly, it looks to me like an example of a technically-challenging product that failed by underperforming on core CS. I'm not sure why it would be framed as low-difficulty, except that consumer-facing tools tend to get written off as simple.

jihadjihad 9y ago

The issue I have with this view is that unless you have people on your team with fundamental, "core CS" capability, creating a behemoth like Skype or Snap just isn't possible. Of course, there's a balance, and who knows, maybe it's Pareto with 80% of the team focused on engineering and 20% focused on math/CS/R&D. The monetary gains the market sees are the direct result of clever math and CS, not bolt-on solutions that can be lifted from libraries on GitHub.