Will Facebook or Google Buy Skype After Talks?

3 minute read
David Roe avatar

While there have been rumors before associating Google with Skype, Facebook with Skype and Skype with other companies in the VoIP space, a report from global news agency Reuters that Skype is in talks about either a partnership, or acquisition,with one or the otherof the twois a little bit more concrete than previous whisperings.

If you haven’t come across it before, Reuters is a global news agency that has built its reputation on accuracy and in business tends to be on-the-money most of the time.

Partnership or Acquisition?

It’s probably for that reason that the report from yesterday is getting so much attention.In it, Reuters says -- citing sources who refuse to be named, but who have a “direct knowledge” of the talks -- both Facebook and Google are separately in talks with Skype with some kind of deal in mind.

The sources have told Reuters that Mark Zuckerberg has had internal discussions with Skype after plans to launch itself on the stock market were postponed until later this year, and after Skype appointed a new CEO, Tony Bates, a former senior vice president of Cisco Systems,last October.

Citing an entirely different source, it says that Google has also been “reaching out” to Skype about the creation of a joint venture, with early talks about the venture already started.

Neither sources have said what option any of the companies are going for, although a launch on the stock markets (IPO) later this year seems to be still on the cards, with estimates of the value of that around US$1 billion, as opposed to the US$ 3 to 4 billion a deal with either of the two companies could be worth.

Facebook or Google?

From current offerings from both companies, it is just about impossible to predict where this could go. Skype already has partnerships with other companies such as Samsung, LG and Panasonic to use Skype with their screen products, so a partnership with either Facebook or Google is always a possibility.

Learning Opportunities

On the face of it, Skype and Facebook would make a good pairing, especially as Skype integrated with Facebook last October, with both companies boasting similar enough user figures of 600 million and 560 million users respectively, and an average of 124 million Skype calls every month.

Google, on the other hand, already has a chat and video service in Gmail, which appears to be doing ok and could probably be developed even further.

There are another couple of things that might swing it in that direction though.Among them is the fact that Google has a whole range of business apps in Google Apps, as well as a reputation as being a provider of apps to the business community -- an area that Skype would love to be doing better in as the majority of its users only ever use the free services. Google has also got Android, with which Skype sits quite nicely.

Social Media Valuations

Whatever is going to happen, it will probably have to happen soon before companies other than Google, or even Apple, start looking at VoIP to fill the demand, and other enterprise 2.0 companies start going public.

In this respect, only this week, Renren -- China’s answer to Facebook -- went public, raising US$ 743 million in its first offering and giving it a valuation of $7 billion after the first day of trading, on the back of the potential of growth in the Internet market there, while LinkedIn has also said it is going public later this year to raise US$ 175 million.