Facebook considering $3-4Bn buyout of Skype

http://mashable.com/2011/05/04/facebook-buy-skype/

by pitdesi • 15 years ago

84 62 15 years ago

mashable.com

d0ne• 15 years ago

"It's the end of the world as we know it." However, I don't feel fine.

http://www.youtube.com/watch?v=Z0GFRcFm-aY

MatthewB• 15 years ago

At first I wasn't sure how Skype played into FB's strategy but I guess it makes sense. Skype would come with a plethora of talent, which facebook is known to spend money for. Also, the Skype technology would allow FB to fill out the video communication side of things that they have yet to tap.

jackvalentine• 15 years ago

Do you have any names in mind for this "talent" that Skype currently posess? I'm not familiar with the company's staff at all but from how the OSX client 5.0 release was such a failure & how bad the android client is I'm inclined to think there isn't much left at all.

jseifer• 15 years ago

Perhaps they will improve the new Skype client.

calebmpeterson4• 15 years ago

In the event of this actually happening, what are some alternatives to Skype's video chat?

jolan2• 15 years ago

flash, SIP video, facetime, AIM/MSN

calebmpeterson4• 15 years ago

can you elaborate on flash a little? thank you!

elliottcarlson• 15 years ago

A personal solution is pretty easy using something like OpenFire[1], Red5[2] and the OpenFire Red5[3] and SIP[4] plugins.

Using this setup you can have an instant messenger, video chat and phone calls.

[1] http://www.igniterealtime.org/projects/openfire/

[2] http://www.red5.org/

[3] http://code.google.com/p/redfire/

[4] http://www.igniterealtime.org/projects/openfire/plugins.jsp (scroll down to SIP Phone Plugin)

VMG• 15 years ago

mumble has video planned (http://mumble.sf.net)

It is not p2p but that could be implemented separately AFAIK

jerf• 15 years ago

Person-to-person video chat is a commodity. If there's a problem it is that there are too many solutions.

nametoremember3• 15 years ago

Yep. It seems Skype just won on brand name.

cop359• 15 years ago

I've personally been looking into this

http://en.wikipedia.org/wiki/Jitsi

has anyone tried it? What do you think? I haven't gotten it to work yet,,,

cookiecaper• 15 years ago

I tried to use it for SIP recently and it did not work well for me at all. I am using Arch Linux and a tiling window manager. It doesn't seem to cooperate with my fairly normal sound setup and the interface is messed up on awesomewm at least. Not worth the effort.

The most reliable VoIP program I've found is twinkle, but it hasn't been updated in years afaik. I used Ekiga exclusively for SIP and video chat for several months but it was plagued with really annoying bugs, including frequent hard locks and unreliable presence/call functionalities.

I haven't been impressed with any Linux SIP/video chat applications to be honest. Empathy and Pidgin use gstreamer which usually doesn't work very well either. The most reliable video chat experience I've had is Skype, despite their buggy Linux client.

gst• 15 years ago

IMO XMPP/Jingle is the best alternative:

- Open standard

- Supports federation between different servers

- Open source cllients available

- Also integrated into GMail (that's the technology that is used when you do a voice or video call)

- Will be fully integrated into Android starting with version 2.3.4

bergie• 15 years ago

Agreed. We were doing mobile video calls with XMPP with Nokia N800s already back in 2007

http://www.flickr.com/photos/bergie/399708279/

decadentcactus• 15 years ago

I _really_ hope that there's no forced integration, logging in with Facebook or anything.

smallhands2• 15 years ago

are you kidding, that will be the first thing they will do

beedogs• 15 years ago

beedogs considering no longer using Skype.

calebmpeterson4• 15 years ago

if FB buys skype I'm out

zackattack• 15 years ago

fear of centralized access to personal information? is there a _secure_ easy voip solution ?

jfruh• 15 years ago

Ha ha, remember when Skype pulled this scam with eBay? Good times!

phlux• 15 years ago

Yeah - but this is actually the most brilliant move that Facebook can make - and makes such greater sense than eBay.

You have a service of 500 MILLION accounts that actually talk to eachother.

The play here is so fucking obvious: the facebook Social technology portal page: It is a smartphone on fucking steroids.

You get voice, an extensive contacts list, all the apps on the platform, updates of actions etc...

There is no way why this is a stupid play on facebooks part.

If this goes through - they will have a phenomenally significant advantage to google. Millions of users that now have every tool they need to communicate. The additional services that facebook shall deploy only further lock in that user base: payments, planning, groups, organizations... eventually it will be about fostering and incubating companies and startups via facebook frameworked group app support.

The next step is the facebook phone... all it has is a data connection - skype all your contacts in-system, and the ancillary apps that they can end up providing through the platform in 5 years will take on apple.

smallhands2• 15 years ago

I know this is off the topic.any body knows a skype like program that runs on lan only thanks

hexley• 15 years ago

iChat/w Bonjour

ryanhunt• 15 years ago

it's not overly surprising considering the recent Facebook<-> Skype integration and Skype's expansion to the USA (new office in Brisbane, CA).

I'd say it's more like likely a 'strategic partnership' than a buy-out. Having said that though, they're both private companies, so it may not as straight forward as a normal 'merger'

omfut• 15 years ago

Its makes more sense for Facebook to buy Skype instead of Google. Here are some of my points.( snippets from my article).

•Enhance their messaging platform with support for Voice and Video powered by Skype. Off course Facebook can develop its own Voice and Video infrastructure. Too me it’s a stretch. Instead by buying Skype they get instant access to VoIP/SMS/Video features •Support Voice/Video will boost the messaging platform, which doesn’t seem to have gained much traction •With Skype Acquisition they also get QIK Live streaming capabilities. That’s an added plus •Instant Access to more than 500 million users. The chances of Skype users having Facebook account are high. There might be an overlap •Facebook can really become a global operator providing Voice/SMS/Video/IM communication to all its users. Off course PSTN access will still be short coming, a partnership with one of the operator can offset this shortcoming •A Facebook phone becomes a reality. Most of the operators are moving towards 4G/LTE, it’s a matter of time that all Voice calls will be carried via IP network. With a partnership with one of the access network, Facebook’s ambitious phone becomes a reality. So constant monthly revenue for basic phone service becomes a reality. Voila! •Patronize Innovation by opening up the Skype platform for developers (Telco 2.0 Platform). Something similar to Twilio, Voxeo etc •Who said Facebook is only for Consumer market, with Skype acquisition they can venture into Enterprise market and become a threat to some of the incumbent Video/VoIP provider like Avaya, Cisco etc •According to CDC Straw Poll 75% of the companies will adopt, Video Conferencing by 2012. Skype already supports consumer video conferencing which can be extended /enhanced for enterprise •Voice conferencing is another big Enterprise feature. So armed with these powerful features, facebook can look beyond consumer market •It makes sense to have different revenue stream instead of relying only on advertisements •Everybody wants a piece of Facebooks social graph including operators. T-Mobiles recently launched Bobsled , a one touch calling within facebook. In fact Facebook can do a better job than Third Party service providers.

murz• 15 years ago

I'm curious what the sources would have to gain by leaking this information? In the Reuters article it says they had "direct knowledge of the discussions", why would they risk their jobs to leak something like this? I don't get it.

inoop2• 15 years ago

The Skype app on Android is really only barely functional, and what is more, the total lack of support or interest in fixing bugs from their side is almost comical. A couple of months ago I fixed a problem where the sound was coming out of the back speaker rather than the earpiece, a problem that seems to affect many people.

I located the problem and fixed it using baksmali/smali. I then opened a ticket on their public Jira server describing the problem, solution, and even attached the patched .apk. Months later they still haven't merged it into Skype proper, even though it's literally a two-line fix. In the meantime loads of people cannot use Skype on their phones.

The fact that a company that is supposed to be worth 1 trillion USD doesn't have the manpower or interest to fix such a simple bug that totally breaks their product for a lot of people should tell us something. From the outside it looks like all the skilled people have left a long time ago, and I wonder if they'll be able to maintain their market position like this.

nametoremember3• 15 years ago

Facebook updated their Android app which meant if you checked messages it would crash. It was fixed but the app still stalls for me.

benjoffe• 15 years ago

> The fact that a company that is supposed to be worth 1 trillion USD...

"Billion"

inoop2• 15 years ago

Yeah, non-native speaker here, the system works a bit different in my language, hence the confusion. I spotted the mistake but couldn't edit my post.

Luckily you can always count on the internet to point out your typos.

cellis• 15 years ago

Unless you're talking about Facebook. Then he'd be correct. ;)

navs2• 15 years ago

Their iOS app is barely functional on my aging iPhone 3G.

Skype took much too long to even update their Linux version. Sure its functional but I'd like to see it receive some attention like its Windows and Mac brothers.

If Facebook does indeed purchase Skype I'm hoping it means the ability to use Skype within the browser so I can stop whining about its apps.

pornel2• 15 years ago

Trust me, you don't want Linux version to get attention that Mac version did ;)

gcb2• 15 years ago

skype is only a good option if they want users. because the only appeal of skype is the userbase. really.

if facebook has the penetration everyone believes they have, skype would be irrelevant. buy any other media streaming company with an actual decent codec and the rest is commodity.

netcan• 15 years ago

Assuming you are right about the tech (I have no idea), it's not necessarily a simple 'user acquisition.' I have a facebook account that I rarely use and a skype account that's always on.

If logged in to skype meant logged in to facebook I would become a very active facebook user.

I can't gauge the value of that to facebook because it's still not entirely clear how they make money (at least not the kind of money investors are aiming for), but it's possible skype is very valuable. Who I call, how long, what hours, these all tell facebook a lot about me. Possibly more than my facebook account does.

Different people use facebook for different things. Photo sharing, address book, networking, chat, email (sort of), social news, games. Skype can add another big bullet point to that list.

Again, it's hard to say good or bad for facebook's bottom line at this point. If you are going by their current revenue model, you would have to relate everything to demographically segmented pageviews but these kind of numbers assume bigger value than that.

gcb2• 15 years ago

that was mostly my point too.

I was mostly questioning how much users (or actual real users that actually uses the site) there are in reality. not in the make believe news lives in.

buddydvd• 15 years ago

Perhaps what Facebook want is all of Skype's customers' credit card numbers. Linking them with Facebook accounts may help boost all of their future 30-percent-comission endeavors.

staunch• 15 years ago

Andreessen was an investor in Qik.

Andreessen did a huge deal to buy Skype.

Andreessen is an investor in Facebook AND on the board.

He sold Qik to Skype for $100M and now he's going to sell Skype to Facebook for billions?

"No conflict, no interest" indeed.

mahmud• 15 years ago

Like a boss!

Dave Chappelle had a sketch where he was defending Michael Jackson despite mounting evidence implicating him in child molestation. Chappelle's defense was "but .. he made Thriller!"

But .. he wrote Mosaic!

jacques_chester3• 15 years ago

It's up to other investors in Facebook to raise this issue. Andressen would at least be expected to recuse himself from any discussions or votes on the matter and I expect he would be sued anyway if the purchase went sour.

(IANAL, TINLA etc)

horatiumocian4• 15 years ago

I am not sure that Marc Andreessen has so much influence at Facebook. He has one of the 3 board seats that are controlled by Zuckerberg. And Skype would be Facebook's biggest acquisition so far, so it wouldn't be easy for him to convince Zuckerberg to do it.

moondowner• 15 years ago

I don't fancy Facebook buying Skype.

grinich• 15 years ago

Why?

exit• 15 years ago

i don't have any positive sentiment towards facebook. i use skype a lot and would resent suddenly being forced to use facebook.

sahaj• 15 years ago

Does Facebook have $3-4B in cash? I didn't think they had that much money. And even if they do, they wouldn't have much left after the deal to move other big plans forward. I guess if they go public first, then it could happen.

horatiumocian4• 15 years ago

Facebook may make $2B in profits this year. So I think they could come up with this cash. Also, they can give some of this amount in stock.

nametoremember3• 15 years ago

In profit? Source? (Not saying you're wrong - I just didn't know and would like to read about it)

nandemo• 15 years ago

Besides paying partly in stock, they can also borrow cash.

jacques_chester3• 15 years ago

Upcoming mashable/techcrunch/other-tech-gossip-site headlines to be linked at HN:

    * Why Facebook will buy Skype
    * This is not a bubble
    * Facebook buying Skype is the dumbest thing ever
    * Skype's two hundred competitors that Google will buy
    * That settles it, we're in a bubble
    * Why Google/Microsoft/Yahoo/Apple should buy Skype
    * How I flipped my VOIP company for $4 billion in funny-money

diegob• 15 years ago

You're doing their work for them!

jacques_chester3• 15 years ago

They've merely rightsized their organisation to wikify their newsroom with crowd-sourced insight. It's totally thinking outside the paradigm, a true hack on pivoting.

kin• 15 years ago

the first thing i thought of was video chat integration into facebook chat exactly the same way google video chat is integrated into gchat. from there, they could monetize on paid group chats, calls to numbers since fb's new messaging is tied to mobile, etc.

horatiumocian4• 15 years ago

I don't see many reasons for Facebook to buy Skype:

1) Technology: Skype's core technology is their P2P technology. They have their own clients for PCs and mobiles. Facebook resides in the cloud, and it works from the browser. This is a huge difference on PCs/Macs, but less so on mobiles, where Facebook also has apps.

2) Price: At $3-4Bn Skype would be by far Facebook's biggest acquisition, as all the others have been under $100M. As they don't have the amount of cash that public companies like AAPL, GOOG or MSFT have (at least not yet), it's quite a big effort for them. There need be a lot of synergies to justify paying this kind of money.

3) Culture: Skype is older than Facebook, and has European roots. Facebook has so far made small acquisitions (more like acqhiring), they don't have any experience with integrating a big company like Skype.

4) Business model: Skype is going for the enterprise market (see the appointment of the new CEO last autumn), and selling subscriptions. Facebook is going for consumers, and selling ads.

Overall, I think a better option for Skype would be an IPO, a telco acquisition, or maybe a Google acquisition.

varjag• 15 years ago

What? Skype is worth so little?

Facebook considering $3-4Bn buyout of Skype

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