Facebook, Skype may link services

By Dow Jones Newswires
Posted Sep. 29, 2010 at 12:55 p.m.

Social network giant Facebook Inc. and Internet telephone leader Skype SA are in talks to mesh their communications services more closely together, a person familiar with the situation said Wednesday.

Under the partnership, expected to be announced within the next few weeks, Facebook users will be able to sign into Skype through their Facebook Connect accounts. Those users will be able to text message, voice chat and video chat with their Facebook friends from within Skype.

The integrated functions are built into Skype’s upcoming 5.0 version, which is expected to be released in the next few weeks, the person said.

The partnership will likely step up pressure on Google Inc., which is battling Facebook for Internet users’ attention and last month moved to integrate voice calling into its Gmail service.

The person familiar with the Facebook-Skype project said eventually enabling in-browser voice and video chat on Facebook would be a “logical progression” to the partnership.

Talks between the two companies were earlier reported by All Things Digital, which is owned by News Corp., which owns Dow Jones & Co., publisher of The Wall Street Journal and this newswire.

The partnership will more tightly link Skype’s 560 million registered users –124 million of whom use it at least once a month–with Facebook’s 500 million members.

Skype distributes free software that lets people make free video calls to other Skype users over the Web. It also has a paid service offering low-cost calls from Skype to landlines or cellphones.

The combination of the two would pose a formidable challenge for Google, which has taken aim at the Internet telephone services market. Google is also trying to make its services “more social” in hopes of reversing a trend that has seen users spend more and more time on Facebook.

U.S. Internet users spent 41.1 billion minutes on Facebook in August, surpassing Google Inc.’s 39.8 billion minutes for the first time, according to comScore Inc.

Google’s attempts to build a social networking service, like its ill-fated Buzz product, have not gained traction with users.

Luxembourg-based Skype has registered for an initial public offering in which it could sell $100 million in American depositary shares. The final amount raised could differ dramatically from the registration amount.

-By Scott Morrison; Dow Jones Newswires

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