Facebook Adds Video Chat With Skype, Deepens Microsoft Ties

Soon 700 Million Global Users Will Be Able to Chat Face to Face

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As of today, your mother can video chat you on Facebook. The social-media giant launched its long-anticipated video chat in partnership with Skype, allowing for one-click chatting for Facebook's 700 million users. The feature will be available to 1% of global users today and 10% by next week.

"Video calling is the first example of what we think of as a great social app," said Facebook's founder and CEO, Mark Zuckerberg. The Skype/Facebook integration differs from traditional Skype usage, which requires users to download software for the internet-phone and video-conferencing service. On Facebook, if a friend you are calling hasn't downloaded Skype's software, a box appears onscreen asking if he or she would like to accept the call. By clicking yes, both people are able to video chat.

"Think of this simply as a mini-Skype client, powered through peer-to-peer technology," said Skype CEO Tony Bates, who was on hand at Facebook's Palo Alto, Calif., headquarters. He and Mr. Zuckerbeg said they have been working on a partnership for a while -- before Microsoft's acquisition of Skype in May -- and Mr. Zuckerberg added that because Skype is now owned by a company he trusts, it makes for an even better working relationship with a more stable partner.

The service is not yet available on mobile. Mr. Zuckerberg said the partnership is indicative of Facebook's strategy of not having to build out every feature, but rather letting companies that specialize in aspects of certain technologies build on top of the social network's existing and far-reaching platform.

Mr. Bates said that half of Skype's business is video chatting. He said said Skype is serving more than 300 million minutes a month of video chats, which accounts for half of Skype's calls. Skype's ad products are not a part of this integration. At the end of 2010, Skype rolled out a unit called "Click and Call" across North America and Europe. It allows its users to direct-dial a local advertiser when users search for businesses on listing-type pages. Skype's display advertising unit rolled out in April, with big-brand inaugural clients including Coca-Cola, Groupon, Visa and Volkswagen, Skype reps said.

There are no economic terms in this new partnership, but the ongoing and intimate relationship between Microsoft and Facebook should allow Microsoft a way to recoup some of the $8.5 billion the tech giant spent on its purchase of Skype in May. In 2007, Microsoft invested $240 million in Facebook; this new feature continues the integration between the two companies, including Microsoft's Bing search engine, which indexes Facebook's social data. With Facebook's entry into the video-chat market, they'll be competing with Apple's FaceTime, Google Talk and the new Google+ Hangouts.

Dan Khabie, CEO of agency Digitaria, said the movie is great for Miscrosoft's repositioning in the tech industry. "Microsoft is changing it's business rapidly into becoming a platform and this is a really good step in that direction," Mr. Khabie said. "Microsoft's next role is as enabler rather than a dominator."

Mr. Khabie, whose agency work with clients including the NFL, Energizer and Intel, said that for brands, the expansion of video chat into group video chat would be a great step. "From a brand perspective and an agency perspective, we could launch a page for a brand and rather than just liking the page, the fans can actually have dialogue with each other about the brand. From a marketer perspective there's a lot more viability with groups."

Indeed, Ford has already created an account on Google's new social network, known as Google+, an indication of potential video chats between Ford consumers and Ford executives.

Since it's limited launch last week, Google+ has been getting rave reviews from the tech community, mostly for the group text chat function. Facebook also launched a redesign of its group chats, allowing for the creation of ad hoc groups. This feature's release is no accident, considering that the friend "circles" on Google+ are a popular feature on the nascent network.

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