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James Perrin

The Skype’s the Limit for Facebook and Google

5th May 2011 Social Media, Facebook, News, Industry News 1 minute to read

Both Facebook and Google are considering separate bids to buy the video conferencing service, Skype.

Discussions are at very early stages and it is very difficult to speculate which offer Skype may prefer (if any), but according to reports from Reuters, Skype is at a crossroads. They have been delaying an eagerly anticipated IPO (Initial Public Offering), which signals that something is going to happen sooner or later.

This isn’t the first time that reports have surfaced over a partnership deal with Skype. Last year, the BBC reported that Skype and Facebook were planning an integration of their services. Such a move seems like a natural progression for both service providers.

Facebook, the most visited site of 2010 [See: Facebook Overhaul Google as the Most Popular Site of 2010], is a customer focussed platform and deal with Skype would certainly see some sort of live Facebook chat. For its users, such integration seems to make perfect sense and already seems conceivable.

Whilst this makes perfect sense for Facebook and its billions of users, it doesn’t necessarily make sense to Skype. According to Larry Dignan from ZDNet, this is because of their business strategy. Looking at Skype’s business strategy, they have been making B2B deals, with small, medium and large businesses. This is how Skype make money, through business usage.

A deal with Google could maintain this corporate business focus, considering Google’s network of small, medium and large sized businesses. As Skype service could be integrated to Google apps, and with their android mobile phones, consumers would also benefit.

As mentioned, discussions are at early stages, but we will be keeping a close eye on this story as developments are made.

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