Saturday, August 6, 2011

Facebook's Skype Deal Deepens Microsoft Relationship

Is Facebook becoming Microsoft's not-so-secret weapon in the latter's battle against Google?

That's what I'm starting to think after Facebook's July 6 presentation in which the company unveiled a new video-chat feature developed in collaboration with Skype. Microsoft, of course, recently acquired Skype for the not-so-low price of $8.5 billion, with announced plans to integrate the latter's assets into Microsoft products such as Office 365.

"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."

During Facebook's presentation, CEO Mark Zuckerberg claimed his company had been working with Skype on the project for the past six months, well before the acquisition announcement. Nonetheless, Skype's emerging role as a Microsoft business unit necessarily means the relationship between Microsoft and Facebook, already close, will only deepen in quarters to come.

Facebook's relationship with Microsoft's Bing search engine is already pretty tight. 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?").

In a March interview with eWEEK, Bing director Stefan Weitz suggested that the Web's social layer has come to mimic the same sort of behaviors that people exhibit in the real world. Even before the addition of the 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.

Facebook could use the added muscle. Google, which almost certainly sees Facebook as a major competitor for online ad revenue, recently unveiled Google+, its nascent social-networking service. Whether or not Google+ becomes an existential threat to Facebook, it certainly raises the specter of increased rivalry--and boosts the pressure on Facebook to create new features that will hold its 750-million-member base. With Skype, at least one of those Facebook features is coming courtesy of Microsoft. And in the process, both companies are bringing something to bear against their mutual rival. The question now is how Google (which already boasts its own video-chat feature) will respond.


Source: http://feeds.ziffdavisenterprise.com/~r/RSS/MicrosoftWatch/~3/7eMkqrB2vQU/facebooks_skype_deal_deepens_microsoft_relationship.html

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