Facebook-Skype Deal Deepens Microsoft Alliance

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Facebook’s new Skype integration is another marker in its long-deepening relationship with Microsoft, says Nicholas Kolakowski

When Microsoft acquired Skype for $8.5 billion (£5bn) in May, it kicked off a good deal of analyst chatter about how Redmond would choose to integrate the communications company’s assets into its product lineup.

How exactly Skype will appear in products like Office 365 remains to be seen, but the acquisition could end up paying dividends for Microsoft in its competition against Google, by giving Facebook — in which Redmond owns a minority stake — another tool with which to battle for social-networking hearts and ad dollars.

Starting 6 July, Facebook users can video-chat with one another using Skype. (The social network is also introducing a retooled people sidebar, supposedly to make initiating chats easier, as well as a way to initiate group instant-messaging.)

“We are now making it possible to video chat with your friends right from within Facebook,” read a note on Skype’s corporate blog. “The partnership with Facebook makes fantastic business sense for Skype and gives us an unprecedented opportunity to offer Skype’s voice and video calling products to more than 750 million active users on Facebook.”

Long-term project with Skype

During a July 6 presentation at Facebook headquarters, Facebook CEO Mark Zuckerberg claimed his company had been working with Skype on the project for the past six months, before Tony Bates assumed the CEO slot or Microsoft announced the acquisition.

“This is going to be something that’s rolled out to everyone that you can integrate immediately,” he told the audience. “It’s so minimal and it’s so easy to use.”

More to the point, it offers Facebook a counter to Google’s own video-chat service, and perhaps even Apple’s FaceTime conferencing feature. Although Facebook and Apple aren’t direct competitors, the two companies apparently had a disagreement over allowing Apple’s Ping, a social-networking service centered on music, to import Facebook contacts. Facebook is also rumoured to be prepping an HTML5 mobile-app platform that would conceivably challenge Apple’s App Store.

Last week, Google offered a limited number of people the ability to start a profile on Google+, its nascent social-networking service. The search-engine giant likely sees Facebook as its major competitor for online ad revenue, and CEO Larry Page has reportedly tied in employee bonuses to success in social networking. Whether or not Google+ becomes an existential threat to Facebook, it certainly raises the specter of increased competition — and boosts the pressure on Facebook to create new features that will hold its 750-million-member base.

Microsoft and Facebook get cosy

Microsoft and Facebook have been deepening their relationship in recent months. When Microsoft decided to evolve its Bing search engine by “infusing the emotional into it,” in the words of Bing director Stefan Weitz, the company chose to do so by integrating Facebook features such as the “Like” button.

When users query Bing for specific people, for example, the search engine can offer Facebook information on the results page. If they’re traveling to a new city, such as Paris, Bing will tell them which Facebook friends live there. Bing will also notify users of airfare deals for places they’ve liked on Facebook, and let users post Bing Shopping pages on their Facebook wall (“Should I buy this?”).

Weitz suggests that the web’s social layer has come to mimic the same sort of behaviours that people exhibit in the real world. Even before the addition of new social features, Facebook and Microsoft had already collaborated on Facebook Profile Search, which leveraged a user’s Facebook connections to deliver more relevant results for people searches; they could also post messages to their Facebook walls via Bing’s pages.

During his July 6 talk, Zuckerberg also painted a portrait of a web increasingly focused on the social — specifically, the ability to share loads of content. “We’ve seen this trend since [Facebook] began,” he said. In terms of how much data people share with those in their social circles, “it’ll be about twice as much a year from now, and twice as much a year after that.” That will affect everything from app development to the tools that people use to interact.

Skype is evidently a vital part — at least for the moment — of that Facebook evolution, and Microsoft owns Skype. More than ever, Facebook and Microsoft find themselves bound together in a growing battle for the web.

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