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Facebook-Skype video chat deal 'nothing new'

Social networking giant now offers Skype video chat, but industry watchers say the new deal simply part of business strategy, rather than groundbreaking technology.
Written by Jamie Yap, Contributor on

Facebook's new deal with Skype, allowing users to conduct video chat with their friends on the social network, is "nothing new" in terms of technology and is instead a strategic business opportunity for all key stakeholders to deepen ties, and expand both market share and user base, say industry observers.

Facebook CEO Mark Zuckerberg on Wednesday revealed the site's imminent launch of "something awesome", confirming rumors that he had sealed a partnership to allow Facebook users to conduct video chat via Skype.

From a technology point of view, the deal is "nothing new", Ovum's senior consultant Craig Skinner told ZDNet Asia in an e-mail interview. Skype has been offering video calls for five years and currently handles 300 million minutes of video calling per month, he noted.

Rather, the deal is an opportunity for Skype--now owned by Microsoft--to grow its market share, and for Facebook to provide greater value to its users, keeping them on the Facebook site for a longer time each day, Skinner noted.

Skype, which currently has 125 million active users per month, is eyeing Facebook's 750 million users who will now be able to easily access Skype's video calling without having to separately register or leave the social networking site, he Skinner pointed out.

Another analyst, Jake Wengroff, global director of social media strategy and research at Frost & Sullivan, saw the Facebook-Skype deal as a way for Microsoft to find more ways to work with the social networking giant, instead of a way to churn revenue.

Only about 6 percent of Skype users actually pay for the videoconferencing service so "no one is expecting the deal to being in any [dollars]", Wengroff told ZDNet Asia via Twitter.

Before it bought Skype last May for US$8.5 billion, Microsoft already had a 1.6 percent stake in Facebook as well as an ongoing Web search partnership with the social network.

User reaction to the Facebook-Skype deal ranged from lukewarm to non-surprise. Singapore-based writer, Shannon Tan, was unimpressed. A Facebook and Skype user, Tan told ZDNet Asia that she can already run both applications concurrently. "Unless I'm using a device that only allows me to run one application at a time, I see no reason why this new collaboration is particularly exciting," she said.

Insurance agent, Regina Lee, added that Facebook's new video chat feature was "expected" since the site wants to be the "one and only place where you socialize online, period".

Not a Google+ retaliation
The Facebook's announcement comes after rival Google just last week unveiled the trial version of its own social network, Google+, to much media attention.

Ovum's Skinner, however, downplayed any suggestion that the Facebook-Skype deal was a response to the Google launch.

"This is unlikely to be a direct reaction to the recently announced Google+, as this level of integration of Skype software within the Facebook Web site would have been a project lasting many months," he explained.

Furthermore, the Facebook-Skype deal has yet to include a group video chat, which Google+ already offers with its Hangout group video function, he added.

When contacted, a Google spokesperson did not comment on the announcement but said in an e-mail statement that Google+ is currently in limited field trail.

"We're actively listening to feedback from our testers. Prior to launching the product, we may make adjustments to the system in response to this feedback," said the company representative.

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