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Facebook and Skype Link Arms Against Google

Facebook and Skype Link Arms Against Google

The world is about to get a little smaller, as Facebook and Skype join forces to give each a lift where the other is strong. The real facilitator behind this partnership may be Google. "The enemy of my enemy is my friend. The common enemy between Facebook and Skype is Google," said ITIC principal Laura DiDio.

By Rob Spiegel
09/29/10 11:38 AM PT

Facebook and Skype will soon announce a partnership, according to All Things Digital. The two companies will integrate a number of functions to enhance the user experience: Users will be able to call and SMS Facebook friends from Skype; Skype will integrate Facebook Connect into its system; and users will be able to video chat with Facebook friends.

The integration will be part of the Skype 5.0 beta, likely to be released in a few weeks.

Reaching Each Other's Members

An integrated partnership will be a potential boon to both Skype and Facebook in areas where each has been nipping at the edges. Skype reportedly has 124 million active users and 560 million registered users, while Facebook has upwards of 500 million users.

While many users will overlap, Skype is stronger in Europe, and Facebook is stronger in North America, so a partnership will offer growth opportunities for both companies.

"Skype will certainly have access to more people through Facebook, and Facebook will have more of an international flare," Aziti Arvani, principal of Arvani Group, told the E-Commerce Times.

The partnership "makes a lot of sense for both companies," she continued. "Skype brings together people for a better and less expensive phone communication, and Facebook connects people through friendship, so the two of them coming together makes a lot of sense -- a lot more sense than when Skype and eBay came together."

Facebook Going Mobile

Facebook has been testing phone communications for some time, including a video chat tool within its chat function. The tests have not yet produced functionality that has caught on. A partnership with Skype would change that. The move would also enhance Facebook's mobile tool chest.

"Facebook has over a hundred million mobile users, and a partnership with Skype would be another tool in its mobile arsenal," John Martin, senior analyst at Strategy Analytics, told the E-Commerce Times. "From Facebook's perspective, they want to be increasingly important to their users' lives. If Facebook can be a conduit for more communication, that would be important to users."

Where's the Revenue?

Skype's basic services are free. Facebook is free. So how would a partnership between the two giants generate revenue?

"There is a lot of money in click-through ad revenue and in licensing," Laura DiDio, principal of ITIC, told the E-Commerce Times.

Most of all, the partnership would likely grow both companies.

"What we're seeing here is the new SOP (standard operating procedure) of the 21st Century. In high tech, nobody has the luxury of time to grow a business organically," said DiDio.

End Run Around Google

The real facilitator behind this partnership may be a third party -- Google.

"The enemy of my enemy is my friend. The common enemy between Facebook and Skype is Google," said DiDio. "At this point, if you're [Facebook CEO] Mark Zuckerberg, you want to keep Google at bay. Google is getting into everything, and if you want to protect yourself, you take them down through partnerships."

Given the threat of Google, and given Facebook's desire to move into mobile applications and phones in general, the partnership is logical, said DiDio. "We've know for a while that Zuckerberg has been looking at phone service, so I would say this move has legs. It makes perfect sense. Facebook is looking to do an end run around Google. I can see Zuckerberg saying, 'Why not go with this?'"


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