Facebook and Skype chat turns to deal

PALO ALTO, California:

The world’s largest social networking website, Facebook, has entered a partnership with the software provider Skype that will offer its users the ability to have live free video chats with each other.

The move intensifies the heated rivalry with the internet search  engine Google, which launched its own social networking service last week, called Google+, which includes a video chat feature for up to 10 people.

Skype, which allows users to make internet phone calls and video calls free, but charges for calls to landline or mobile phones, is taking a calculated risk to expand its user base, said a Gartner Research analyst, Ray Valdes.

Microsoft, a longtime Facebook partner that invested $US240million  for a small stake in the company in 2007 and sells ads on the social network, is buying Skype in an $US8.5billion ($7.9 billion) deal expected to be finalised this year.

The world’s largest software company has been battling Google with its Bing search engine and cloud-computing services.  Microsoft is hoping that Skype will give it a stronger position in online communications.

Analysts said the Skype acquisition would solidify Microsoft’s partnership with Facebook, which is valued at more than $US70billion on private trading exchanges and is expected to go public next year.

Facebook now has surpassed 750 million users, up from about 600 million at the beginning of the year. But its explosive growth has begun to slow as it hits critical mass and competition in social networking heats up.

The co-founder of Facebook, Mark Zuckerberg, said   four billion ‘‘things’’ were shared every day on Facebook and that he expected that number to double every year.

SOURCE: The Sydney Morning Herald