When it rains, it pours. And eBay's recent billion-dollar writeoff of Skype, the VOIP startup it bought two years ago, could have an impact on Facebook's negotiations to sell a stake in the social network, at a high valuation, to Microsoft or another large backer. (Both Bernhard Warner and Kara Swisher make this observation, which I'll attribute to great minds thinking alike.) Skype's financial failure is a sobering reminder of the risks of overpaying for a startup. And all of a sudden, Microsoft CEO Steve Ballmer is playing diffident, saying Facebook "might be a fad." But what may be forgotten in this latest skeptical turn to the hype cycle is that underpaying has risks, too.

Widget-maker RockYou may be willing to spend millions on Facebook applications, but bidders at eBay are a little more discerning. Michael Zhang was first to auction a Facebook application on eBay, and the bidding on his Logbook app closed yesterday. Logbook documents movies, music, and books and ties into Amazon's affiliate-marketing program as a source of revenue. It's less popular and viral than spraypainting your friends' walls — on the other hand, there is the potential for actual revenues — an unusual feature for Facebook's hangers-on. So how much was the winning bid for Logbook?

Google's purchase of YouTube for $1.65 billion last year birthed the current climate of Valley exuberance. Without that purchase, it's hard to imagine seeing, for instance, Facebook valued at a lofty $15 billion. But we hear that the deal hit one last-minute, off-the-wall snag.

FANTASY M&A —The buzz is all about Microsoft, or possibly Google, taking a stake in Facebook, the popular social network, at a lofty valuation as high as $15 billion. But the logic of those deals is driven by advertising — the more targeted, the better. But what, exactly, are advertisers hoping to target, and why? Besides crude demographics and geographies, the most logical hooks for ads are Facebook users' expressed preferences — the books, music, and movies they're increasingly listing on their profiles. And who has the best data on what consumers will buy? Why, Amazon.com, of course. The logic of a combination — a merger of the two giant databases of consumer preferences is, at least on the surface, compelling.

The Wall Street Journal is reporting that Facebook is negotiating with Microsoft to sell a stake in the hot social network at a valuation between $10 billion and $15 billion. That would net Mark Zuckerberg's company between $300 million and $500 million in cash, without Zuckerberg having to surrender any meaningful control over the company; the stake would represent 5 percent or less of Facebook. What's not clear is why a deal's happening now, save to lock in a stratospheric valuation. Some time ago, a Facebook insider called Zuckerberg "a crazy kid" for not selling. And we've said Facebook's valuation claims seemed a bit puffed-up. But given that suitors' offering prices have rocketed tenfold since then, Zuckerberg doesn't seem that crazy anymore. Instead, it's Microsoft executives, driven mad by Google and MySpace envy and determined not to miss out on the social-networking trend, who seem, well, a bit off.

Despite rumors to the contrary, News Corp. president Peter Chernin says there are no talks and no deal. His boss, Rupert Murdoch, was reportedly thinking about trading MySpace for a 25 percent stake in Yahoo.

South Park creators Trey Parker and Matt Stone have opened up SouthParkStudios.com, an "Internet hub" — what's wrong with just calling it a "website"? — to promote the show online and combat rampant piracy of the cartoon show on YouTube. It will also host new projects prior to their TV launch. [PaidContent]

Kara Swisher says a MySpace acquisition is off the table, but Yahoo is considering all kinds of other options — including partnering with Google to make more money off its search ads. [AllThingsD]

Indiana University's decision to partner with "human-powered" search engine ChaCha shouldn't have been controversial. ChaCha's based in Indiana and was founded by two IU alumni. Universities often have ties to local startups. Did anyone question Stanford's use of Google, or a professor's investment in the company? No, the controversy comes because no one actually believes that ChaCha is a better search engine than Google, and, more importantly, the partnership conscripts the university's library and IT staff into working for the search engine for free. And it's always the coverup, never the cime. In attempting to downplay university president Michael McRobbie's ties to ChaCha, university officials made the situation much, much worse. Someone's lying. It's just a question of to whom, and when.

Kara Swisher notes that News Corp. CEO Rupert Murdoch quietly confirmed a rumor: His company's talks with Yahoo about swapping MySpace for a large stake in the online portal were real, but derailed by Terry Semel's departure from the CEO spot at Yahoo. [AllThingsD.com]

NBC's Bravo division swallowed independent TV criticism site Television Without Pity, proving the networks are just like everybody else: fascinated by strangers' comments about them on web pages. The Peacock Channel had already returned the web site's snarky attention with a shout-out in an episode of NBC's My Name is Earl, and in a story in NBC's West Wing. Now they can keep the mutual backscratching, and backstabbing, where it ought to be: within the same cosy corporate family.

One of the most annoying myths of start-up culture is the notion that big explosive "deals" are sealed anywhere — like over a game of Foosball or a milk shake at Denny's. Or — in the case of Flock.com's deal to market a special version of its social browser through photo publishing service Photobucket — broached while blading. How wacky.

LOCKHART STEELE — Seems like just a few weeks ago Valleywag was musing on the subject of The Rollup. (Oh, wait.) Then today's newsprint brings this: social dogooder-cum-softcore pornographer Dov Charney has sold his American Apparel clothing business to the Endeavor Acquisition Corporation, a small, publicly traded group that's making its first acquisition with American Apparel.

After three months of stalled talks, reports the Wall Street Journal, Yahoo is still nowhere close to buying Facebook. the real question is no longer "when will Yahoo buy Facebook" but "why hasn't Facebook walked away?" And the answer is that Facebook must be more desperate than they pretend.

The New York Times takes a good look at Yahoo's woes today (even throwing in this shot of CEO Terry Semel looking like beleaguered Battlestar Galactica leader Colonel Adama), particularly its struggle to upgrade its advertising system and its inability to land a deal without Google swooping in.

"CEO Eric Schmidt explains what's behind the company's new push for partnerships," promises TIME in its new article, "Google's Chief Looks Ahead." Great, because we've been wondering just that (see "Chaos theory: How to tell if a Google deal means anything" and "Deal or No Deal: Why is Google announcing so many partnerships?"). So what does Eric tell TIME?

• Is it that big a deal that Netflix offered a million-dollar bounty for anyone who improves its movie recommendation engine by 10%? Wait, how do you even measure the accuracy of movie recommendations? Who cares, the media's eating it up as if they get a finder's fee. (If you win this contest after reading it on Valleywag, you do owe us a finder's fee: a lifetime subscription to "Netflix: Porn Edition." [NY Times]

We already know why Google announces so many useless partnerships, or at least one fringe benefit for the company, which is to signify that everyone is on its side, not Yahoo's or Microsoft's. Now Fortune Magazine reiterates: "Working with Google and grumbling about it is quite in fashion." There are so many deals and rumors of deals out there, how can anyone tell which deserve attention? Easy: Which exec made 'em?

Takeaway: YouTube's new deal with Warner Music looks like the dot-com's salvation, but it could be its downfall.

The Internet went a-twitter last week when John Gotts (who made his millions selling anti-spyware software) bought the Wiki.com domain for $2.86 million. When users on Digg.com called this a sign of a tech bubble (how do you make a site about wikis earn millions?), Gotts defended his purchase by summing up his business plan: