-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.

Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.

The deal values Skype at a face-saving $2.75 billion, well above the $1.7 billion at which it has been valued on the ecommerce giant's books. Ebay also stands to keep a 35 per cent stake in the company.

But that overlooks the humiliating $1.4 billion eBay has written off on the original deal. Four years ago, eBay promised to pay up to $4.3 billion for Skype, but it later scaled back the total payout. All told, it makes Skype one of the biggest value destroyers of any Internet merger since the last days of the dot.com era.

EBay's justification for the Skype deal in 2005 was how its chat and calling services could serve as an online customer service platform connecting consumers directly into eBay merchants. That never happened.

Instead, product innovation slowed and business setbacks, such as a corporate ban on Skype's network-hogging software inside companies, were allowed to fester, rather than becoming new business opportunities.

Pressure to justify the inflated acquisition price by wringing merger synergies out of the deal also proved a distraction. Into the void stepped newer Internet phenomena such as YouTube, Facebook and Twitter, all of which Skype might have displaced.

To be sure, 15 million users sign on every day to Skype for Web-based chats, phone conversations or video phone calls. Skype has registered nearly 500 million users worldwide since its founding in 2002.

Financially, it is still growing at levels that Web companies like Twitter can only dream about. Revenues of $551 million last year look on track to rise to $700 million in 2009, and the company has a goal of hitting $1 billion within two years. It has been profitable for several years, though Skype will not say by how much.

Yet it will take more than this to justify the valuation put on it by its new owners that says Skype is worth more than four times expected 2009 revenue. This looks difficult as long as its primary business remains undercutting established telephone companies on international calls when those rates are rapidly heading towards zero.

The reality is that -- outside of deals with renegade mobile operator 3 -- Skype is considered a pariah by most of the world's telephone operators. They hate how Skype's free, or nearly free, calling services undercut prices for their own calling plans.

Despite these hurdles, Skype must find its way into the center of the growing convergence between phones and computers. To succeed, it must mount a challenge to the new communication market leaders -- Apple and Google, and even companies such as Twitter.

Only then will Skype be able to claim it has defied the odds and become the company to beat once again.

As centers of innovation go, there are worse places to place a bet on the past repeating itself than California's technology hub. Looking beyond the Internet, housing and credit bubbles, it's still the preferred playground of such leading financial weathervanes as venture capitalists, gizmo nerds and software studs.

Perhaps Wall Street, searching for reasons to remain optimistic about the market's summer rally, should take heart from the spate of articles painting pictures of green shoots all over Silicon Valley. The Wall Street Journal's Deal Journal notes that tech IPOs are staging a comeback, and asks if its time to party like it's 1999?

Our reporting shows that investors, encouraged by a growing number of acquisitions and public stock flotations in the past few months, are keeping a close eye on a coterie of promising startups in Silicon Valley. David Lawsky identified six privately held companies as the ripest for acquisition or readiness to go public, out of 34 cited in industries ranging from alternative energy to social networking.

The top four are business social network LinkedIn, solar panel maker Solyndra, smart grid company Silver Spring, and Zynga, a casual games company whose products run on social networks like Facebook. Two others are Guidewire, which makes software for property and casualty companies, and LiveOps, which runs call centers using private contractors who work from home.

But he reports that the Silicon Valley Six say they intend to keep growing organically rather than agreeing to be acquired or go public during the recession. Recession or no, there is clearly plenty of money looking for a ride. That's the thing about bubbles; they tend to be more fun when you catch them early.

MySpace is looking to buy Web music service iLike for around $20 million according to several blogs. iLike co-founder Hadi Partovi declined to comment when we asked him and MySpace’s PR team also declined to share details.

All Things Digital has the latest details of the deal which they say is around $13.5 million in cash, with a $6 million earn out for the founders which include Hadi’s twin brother Ali who is CEO. Official confirmation of an agreement is being held up by “thorny tax issues” according to All Things Digital’s sources.

The news makes some sense because as MySpace is fast losing ground to Facebook in the social networking arena. MySpace’s owner, News Corp, has indicated that it sees the site becoming more of an entertainment portal.

In fact according to our sources MySpace Music, the joint venture between MySpace and the major music companies, is one of the few parts of MySpace that’s doing well — at least in terms of popularity and usage.

iLike, which was once the darling of the the digital music start-up world, has ended up struggling like many others, as the industry tries to find a new profitable model for the distribution of recorded music over the Web. iLike has one huge advantage — it is default music application/platform on Facebook. It also has corporate backing from Ticketmaster.

But rather like its host Facebook, iLike’s popularity has yet to translate into meaningful dollars leading to what some of the blogs are terming a ‘fire sale’ of its assets.

AllThingsD also had details of other potential bidders which the blog said included Activision and Microsoft.

(Photo: News Corp CEO Rupert Murdoch and MySpace founder Chris DeWolfe in 2007/Reuters)

Technology market research firm Gartner Inc has published the 2009 "Hype Cycle for Emerging Technologies," its effort to chart out what's hot or not at the cutting edge of hi-tech jargon. It's just one of an annual phalanx of reports that handicap some 1,650 technologies or trends in 79 different categories for how likely the terms are to make it into mainstream corporate parlance.

Jackie Fenn, the report's lead analyst and author of the 2008 book "Mastering the Hype Cycle," delivers the main verdict:

Technologies at the Peak of Inflated Expectations during 2009 include cloud computing, e-books (such as from Amazon and Sony) and internet TV (for example, Hulu), while social software and microblogging sites (such as Twitter) have tipped over the peak and will soon experience disillusionment among corporate users.

Click to enlarge

What's most interesting in the report, now in its 14th year, is what the corporate research firm says is a long way off from the mainstream.

It will take up to five years for many of today's trendy technologies to become mainstream, including Web 2.0, cloud computing, Internet TV, virtual worlds, and a true corporate mouthful, service-oriented architecture (SOA).

Funny how long hype cycles take to pay out. Three years ago, in its 2006 Hype Cycle Report, Gartner predicted Web 2.0 would go mainstream within just two years.

More than five years out, which means nearly dead in terms of industry attention, are technologies such as the once hot radio-frequency ID (RFID) concept, along with mobile robots and human augmentation and some absurdly high concepts like context-delivery architectures.

The second chart, on the right, describes Gartner's methodology. It's all very imprecise, but a game worth playing.

Images: Gartner (August 2009)

Emerging Technology Hype Cycle archives
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Social gaming startups, which offer free-to-play games on sites like Facebook and MySpace, have been all the rage, scooping up funding from the venture capital community and nabbing executives from traditional gaming outfits. The hoopla seems warranted given the meteoric growth many expect to see in the space over the next few years.

Playdom, which was launched last year but only emerged from stealth mode in March, recently made a big splash when it lured John Pleasants from his perch as COO of Electronic Arts to become its CEO. Playdom battles rivals Zynga — which predicts revenue of $100 million or more this year — and Playfish in an increasingly competitive space.

In an interview, Pleasants called his return to the startup space “refreshing” and used a whiteboard to make a convincing case about the industry’s potential. He pegs the overall social gaming market at around $500 million, but expects that to increase ten-fold in the next several years.

Playdom has 13 games, including the popular “Mobsters, and around 20 million monthly users. It has 80 employees and expects to double that number by the end of the year. The company — which is backed by angel investors — won’t discuss its finances, but says it’s profitable and growing revenue by the month.

Free-to-play games generate revenue through the purchase of virtual goods within games — such as a more powerful weapon — that allows a user to advance more quickly. Plesants estimates only 1-3 percent of users actually buy anything in games, although that figure is higher in more popular titles.

Analysts say social games are attracting a large, growing and dedicated audience that is displacing traditional media outlets. Pleasants noted that the average “Mobsters” user spends 45 minutes a day playing the game.

“I don’t spend 45 minutes a day watching TV, yet I pay Comcast $100 a month,” he joked. “Can you imagine If we get users to pay even $1 a month?”

If you were miffed at not being able to tweet your innermost thoughts and random musings to your followers yesterday, or post that smartypants comment on a friend’s Facebook status update, blame politics. Turns out the reason why Twitter was knocked down for hours, while Facebook users had trouble logging in and posting to their profiles on Thursday was a Georgian blogger who uses both services.

According to CNET, which cites Facebook’s chief security officer Max Kelly, the blogger also has accounts in LiveJournal and Google’s Blogger and YouTube platforms, and goes by the name of Cyxymu, which is the name of a town in Georgia. Kelly told CNET:

“It was a simultaneous attack across a number of properties targeting him to keep his voice from being heard.”

Now, for those who don’t follow international politics closely, here’s why the pro-Georgian blogger may have been targeted. August 8 marks the first anniversary of the war that broke out between Russia and Georgia over South Ossetia. Russia sent troops into the separatist region last year, which Georgia claims forced it to launch a counter-offensive. Some other folks say the war started on August 7, 2008. So it was probably no coincidence that the Web attack on Cyxymu, the blogger who blames the attack on Russia, took place on the eve of the war’s anniversary.

Whatever the date, one thing is clear: the more Twitter becomes a communication tool in zones of conflict, the likelier it is to become a target for hackers with political motives. The micro-blogging service obviously needs to step up security so that hack attacks don’t shut it down. After all, regular folks like MC Hammer still need to get to the airport.

Keep an eye on:

• Platinum Equity turns up as the third bidder for The Boston Globe. (The Boston Globe)
• TV dealmaking season wraps up; prices, volume down. (Reuters)
• News Corp’s Fox has asked distributors to withhold DVDs from Redbox. (Bloomberg)

Photo: Georgian national flags/Reuters

MySpace.com dodged a bullet on Thursday, but in the process the social networking site may have gotten a stinging slap in the face instead.

Hackers trained their fire on social media highflyers Twitter and Facebook Thursday morning, knocking the former entirely offline for a few hours and slowing things down on the latter site.

LiveJournal, a blogging site, was also a victim of the so-called denial of service attacks.

At MySpace, once the Internet’s top social networking destination, life went on as usual.

Perhaps the malefactors didn’t deem MySpace a target worthy of attention. MySpace’s popularity has waned at a time when Facebook and Twitter have experienced massive user growth.

In June, MySpace announced plans to cut 30 percent of its U.S. workforce and to close at least four international offices.

Or perhaps the site, owned by News Corp, was more adept at fending off Thursday’s cyberattacks.

MediaFile wanted to ask MySpace what the story was, and see if it felt snubbed in the event that hackers had overlooked it, but the company would not make a spokesperson available for comment.

Apple isn’t going out of its way to publicize the problem, but the Sydney Morning Herald has reported that cracked Macbooks are troubling users. Underscoring that, a Flickr site carries pictures of more than 200 cracked Macs, posted by the owners, along with their commentary.

Apple spokesman Bill Evans invited users with problems to bring them to Apple.

“Any user who has an issue with their Macbook should contact AppleCare for support, even if it is out of warranty,” he said of the problem, which dates back to at least 2006 and is still angering consumers.

Apple won’t say if they have upgraded the plastic that cracks, how many Macs they have fixed or if they expect more troubles as the aging plastic splinters.  Although the problem is notorious in old machines, users say it has also appeared in machines that are less than a year old. A British website, The Inquirer, reported earlier this year that Apple will repair the problem for out-of-warranty Macs at no charge.  Users like this one on the Flickr site also said the machines were repaired at no charge.

At a Facebook site dedicated to the problem, a user reported getting his machine fixed only to have it crack again. Others on the Flickr site also reported recurring problems.

If Apple seems to be playing down the problem it’s understandable. People pay a hefty premium for Apple products compared to PCs, and the company prides itself on the sleekness of its design and the quality of its products.

Photo: An Apple launch event/Reuters.

(Reporting and Writing by Laura Isensee)

    Still not sure about Twitter?
   More than half of Fortune 100 companies are using the wildly popular micro-blogging site, according to a new study, adding to growing buzz in the business world that Twitter hopes to convert into revenue this year.
   

Twitter trumped other social media as the online tool of choice for the Fortune 100 firms, according to the study by public relations firm Burson-Marsteller and its digital media unit Proof.
   

Some 54 percent of them regularly send out “tweets” or messages of 140 characters or less. The companies primarily use Twitter to blast news; for customer service; to announce promotions; or for employee recruitment. 
  

 Blogs hold the No. 2 spot, with 32 percent of the companies regularly posting to a branded blog.
    Social networking site Facebook came in third. Twenty-nine percent of Fortune 100 companies have active, consumer-focused fan pages on Facebook.

Facebook shareholders got the long-awaited gift of liquidity last week when Russia’s Digital Sky Technologies began buying up to $100 million of Facebook common stock from current and former employees.

The latter group however, may end up with bupkus, as it turns out that the program puts ex-employees at the back of the line.

Only after all of Facebook’s current employees have had a chance to sell their stock to DST for $14.77 a share can former employees step forward to cash out their shares, according to person familiar with the matter.

That’s sensible enough, since the point of the program is to help Facebook’s loyal workers get funds to defray the cost of living in costly Palo Alto, California, and not to line the pockets of people who jumped ship.

But it means that former Facebookers may not get a chance to reap the benefits of their stakes in the world’s largest Internet social network. If Facebook’s current employees use up the $100 million that DST has committed to buying shares, ex-Facebook shareholders are out of luck. And forget about cashing out through an IPO any time soon.

The terms of the DST stock purchase allow Facebook shareholders to sell either $1 million worth of shares, or 25 percent of their total shares, whichever is larger, the person said.

The best hope for ex-employees, the source said, is that DST decides to buy more shares when the current share purchase program ends next month.

Facebook would not comment on the terms of the deal.

Photo: Reuters