Skype to Facebook: Keep Your $4 Billion
Rumors swirled last night that Skype was in talks to sell itself to Facebook for as much as $4 billion, according to reports from Reuters and the Guardian – but the deal will most likely not go through.
Skype has been down the aisle before, marrying into – and even having affairs with – Internet royalty, with mixed success.
Yet Skype claims about 845 million accounts, so why shouldn’t it pair up or seek synergies with Facebook, the largest social network, which boasts over 500 million members?
Skype and Facebook have been romancing each other for quite some time; currently, there is an integration with the Facebook News Feed, so users can see, comment on and Like their friends’ posts in Skype for Windows. A new interface was announced last month. Skype also has its Skype Me app on Facebook, which when access is allowed, links to SkpFB and calling or chatting becomes possible.
Skype had previously worked with MySpace. In October 2007, Skype joined forces with MySpace – at the time, the largest social network – to offer MySpace users free calls through instant messages. The alliance was dissolved less than 3 years later (without fanfare – the MySpace icon was simply dropped from the 5.3 version of the software.)
I Hear a Voice
Communicating via Facebook is currently still relegated to text – the Wall, Messages, and Chat – even though the site has a huge footprint in the mobile space. Despite that more than 250 million active users currently access Facebook through their mobile devices – and such users are twice as active on Facebook than non-mobile users – and there are more than 200 mobile operators in 60 countries working to deploy and promote Facebook mobile products, Facebook has not developed its own Facebook-branded calling feature.
I always wondered why.
On April 20, a freelance reporter from NewsFactor Network asked me for comment on T-Mobile’s Bobsled free VoIP application, which was now going to be available for integration with Facebook users’ Friends signed on to Chat. “Giving a voice to social networking,” is what T-Mobile was hoping for at the time, and curious, I downloaded the app and noticed its integration with my Chat List by the small green telephone next to everyone’s name. At the time, I explained to the reporter – and was quoted – that T-Mobile had beaten Skype to the punch.
But I was wrong. Six days later, T-Mobile suspended the Bobsled Facebook app.
Was someone else promised the coveted spot of delivering Facebook’s voice calling feature? Could it have been…..Skype?
Skype can do wonders for Facebook users, but it will most likely remain just that – an alliance.
A sale to Facebook could be as high as $4 billion, dwarfing its $100 million expected IPO, but Skype has been down this road before. Niklas Zennstrom and Janus Friis, the founders and developers of Skype, sold their company to eBay for $3.1 billion in 2005, only to have the online auction giant sell it back to the founders and additional investors less than four years later. If blue-chip Internet company eBay couldn’t handle – or monetize – Skype, can Facebook?
A Facebook acquisition would create and provide a richer, more dynamic experience for users of both services, but the big payday from buying Skype probably won’t arrive: currently, only about 6% of Skype users actually pay for the telephony service.
For additional revenue, Skype announced in March that it would be selling display ads on its homepage, a strategy with success that remains to be seen.
Given Facebook’s interest in telephony – but simultaneous interest in turning a profit in advance of going public – buying Skype outright just doesn’t seem likely.
As such, Skype will go ahead with its plans to go public, and I’m curious to see what exciting plans it has in store.
Jake Wengroff is the founder of social business consultancy JXB1. Jake evaluates technologies, vendors, markets, and trends in the social media ecosystem. He also advises and consults with clients on social business, marketing, collaboration software and change management. Find him on Twitter @JakeWengroff.
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