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KnockMedia’s Technology Blog

May 2011 6

Google And Facebook Both Have Eyes For Skype

Facebook and Google are reportedly each separately looking into teaming up with Skype, or even buying the web video conferencing company outright for a deal estimated to be valued at $3 billion to $4 billion. Sources with direct knowledge of the discussions say that Skype has delayed its IPO, with which it expects to raise about $1 billion, until the second half of 2011 while it engages in talks with the two massive entities.

Both have approached Skype about starting joint ventures, and the sources say Facebook CEO Mark Zuckerberg has personally conducted internal talks about buying Skype. None of the companies have offered official comment.

Securing Skype as a partner would expand Facebook’s user base, help it grow in international markets where Skype is popular, and give its half-billion users another reason to remain active and connected to its online community. Google Talk already features video chat via Gmail, but a partnership with Skype could prove especially fruitful in the mobile video arena, where Google Talk on Android systems is challenging Apple’s FaceTime for iPhones.

Analysts also say a tie-up between Facebook and Skype would make more sense than one with Google. The discussions are in early stages, and it is not clear which option the company favors, according to the sources.

Last year, Facebook and Skype sealed a deal making it easier for Facebook friends to video chat, and it’s not taking much of a leap to theorize that the next step could be integrating Skype directly into the Facebook interface.

This isn’t the first time Skype has drawn this type of attention. Google is just one of the companies rumored to have sought to purchase it in the past few years. eBay actually did, for $3.13 billion in 2005, and later sold the majority of it to an investment group led by Silver Lake Partners.