Overpaying for Acquisitions

In a continuing theme from prior posts (see
When M&A makes sense and If merger is the answer, what is the question, here's more evidence of the difficulty firms face in making profitable acquisitions.

In late 2005, online auctioneer eBay bought the Internet phone service company, Skype for $2.6 billion. In October of this year, eBay admitted that it overpaid and took a $1.43 billion charge against earnings.

$1.4 billion dollars - that's some serious coin. Ouch! Details on the write-down available here.