Microsoft And Skype

I read this
(http://www.theregister.co.uk/2011/05/10/microsoft_skype_buy_near/ and http://www.theregister.co.uk/2011/05/06/who_should_buy_skype/) today.

Microsoft plans to purchase Skype for $8billion. Skype's annual revenues are approximately $1b and profits are about $30m (http://gigaom.com/2011/05/06/facebook-skype/, http://www.businessinsider.com/skype-ipo-analysis-rebtel-2010-8, http://gigaom.com/2010/08/29/is-skype-up-for-sale/). They have 124 million active users, about 25m concurrent users and 8m paying users.

Note:

Annual profits have been extrapolated from 6 month data given in the article above. This value could be off by about 10%.

This means that the average revenue per user (ARPU) is about $8 per year, considering only active users. ARPU for Bharti Airtel, a leading telecom company in India is about $8 per month. While Airtel and Skype address different (types of) markets this data would be good to have in mind.

As per the article above, Skype has 8m paying users. This is 6% of their active user base. 

ARPU of paying users is about $125 per year or $10 per month. This sounds reasonable.

But a valuation of $8b for an annual revenue of $1b and profits of 30m seems too high. We seem to be chasing paper money again.

Let history remember this day that I said MS is making a colossal mistake.
Related reading:
http://online.wsj.com/article/SB10001424052748703864204576315501698635160.html
http://www.winsupersite.com/article/cloud-computing2/microsoft-skype-136128
http://www.wired.com/epicenter/2011/05/microsoft-buys-skype-2/
http://en.wikipedia.org/wiki/Skype
http://in.reuters.com/article/2011/05/14/idINIndia-56917620110514