Analysts Agree That Facebook Should Buy Skype
Facebook would do well to acquire VoIP giant Skype, analysts said, giving the social network’s users calling capabilities and helping Facebook battle Google
Just hours after news surfaced that Facebook and Skype could be entering into a Voice over IP (VoIP) partnership, industry watchers seized on the potential deal as a flirtation that should evolve into an acquisition.
AllThingsDigital reported that Facebook and Skype are mulling an integration to allow users of the world’s largest social network to send text messages and make voice and video calls to friends and contacts via Skype.
Facebook Connection
Facebook users would be able to sign into Skype through Facebook Connect, which allows users to sign into third-party Websites with their Facebook accounts. The integration – which would enable Facebook’s 500 million users to connect easily to Skype and its 560 million registered users – is expected in the Skype 5.0 beta this month.
GigaOm issued the obvious question, “Should Facebook Buy Skype?” in this blog post, noting that a merger of the dominant Web telephony platform and largest social site is a logical combination to keep users away from Google. Others have similar beliefs.
Industry analysts largely agree, with caveats. Forrester Research analyst Augie Ray said Facebook has already become a significant communication channel for many people. He added that whether Facebook buys Skype, forges the alleged deal with the VoIP company, or creates its own VoIP capabilities, video chat provides important face-to-face connections for users.
Ray noted that while Facebook status updates are already near-real-time communications, the social network’s chat application is not very efficient.
“This is a great next step for Facebook,” he said. “Skype will give Facebook users the chance to make true face-to-face connections.”
IDC analyst Irene Berlinsky said Skype and Facebook have the same goal of becoming accessible from any device, anywhere, anytime, adding that Facebook clearly needs a robust calling option to compete with Google, which also wants to become the “be-all, end-all of consumer communications”.
Google offers VoIP calling capabilities in Gmail, via its Google Voice phone management application, in addition to voice and video chat capabilities.
Berlinksy agreed with Ray that Facebook need not buy Skype to gain this capability. She noted that a simple integration with Skype, such as the one AllThingsDigital unearthed, may be enough for this to happen without going through the hassles and headaches of an acquisition.
Gartner Research’s Ray Valdes said the hypothetical combination of Facebook and Skype makes a lot of sense, except for the high price tag it would entail. Privately-held Facebook, valued at $33 billion, might have to pay $7 billion in stock for the company, which has seen nasty legal battles for the right to own and manage the assets.
“The battle for the social Web is shaping up to be a conflict among giants and would-be giants,” Valdes told eWEEK. “If Facebook is to stay at the top of the heap, it needs to bulk up, and buying or merging with Skype would make a lot of sense. If Google wants to topple Facebook, then it too would have to make a sizable investment – such as buying Twitter,” Valdes said.
But that’s a whole other rumour, one rekindled by Google CEO Eric Schmidt at TechCrunch Disrupt when he fawned over Twitter’s advertising revenue potential.
