The Naked Negotiator

In a South Park sketch, the gnomes steal underpants as part of a three-phase business plan. The business plan reads:

1. Collect underpants
2. ?
3. Profits

Pixieland dealmakers buy companies or assets with no proven profits or business models in the vain hope that they can make money where no one has before, and big dealmakers are not exempt from this madness.

Meg Whitman, CEO of eBay, bought Skype from it’s inventors for $2.6 billion in the illusory hope it could find a way to turn Skype clients who were attracted by Skype’s free services into profitable fee-paying customers.

eBay hasn’t succeeded so it has written down the Skype purchase by over 50%.

Forbe’s software columnist, Daniel Lyons writes Sun Microsystem’s purchase of MySQL for $1 billion looks to be another Pixieland deal.

MySQL has sales of only $70 million and doesn’t according to Lyons seem to be making much money from selling its open source software.

The MySQL Chief Executive Marten Mickos believes Sun’s ownership will leverage it’s sales to $1 billion.

I suspect it won’t be long before the purchase is written off as a moment of madness.

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