Facebook-Skype Video Gives Microsoft Upsale Opportunity

 

Where does Microsoft come in to all of this? Well, Microsoft is about to buy Skype. Once that happens, Facebook's video chat capability will depend on Microsoft. If this capability becomes important and especially if Microsoft extends the group video chat capability it's been developing to Skype, then it could hold a key to Facebook's continued ability to compete with G+ in terms of instant communications.

Now consider that Microsoft is already an investor in Facebook. Does this mean that Microsoft is already subsuming Facebook, partly from within and partly by controlling part of its interface to the outside world? It's never easy to know for sure what Microsoft executives are thinking. But the company obviously has its sights set on Google. Bing, the Microsoft search engine, provides search results to Facebook and competes with Google. Office 365 is clearly intended to compete head to head with Google Apps for Business. Why wouldn't Microsoft be looking for a way to counter Google's move into the social media?

But does this mean that Facebook will slowly become a Microsoft service in the same sort of way the MSN instant messaging client (now Windows Live Messenger) was designed to counter AOL's Instant Messenger? The answer is probably not. At this point at least Facebook doesn't offer Microsoft enough capability to justify the investment. Besides, there are many indications that Facebook's rise may have already peaked. Why would Microsoft want to ride a falling star?

But that doesn't mean that Microsoft wouldn't welcome a flood of new customers for its paid services. On Skype, it's the computer-to-computer calls that are free. For access to wireline and wireless phones, you need to pay. And while Skype is a seriously cheap means of making calls to phones, it's still money. Microsoft likes money, and not only because its stockholders insist on money.

If Microsoft can make the Facebook-Skype tie-in more than just another way to access Skype, then Microsoft, Skype and Facebook can provide a rational alternative to G+ and its video chats. But to do that, it has to compete with a lot more than Zuckerberg brought to the table during his Skype announcement. The new offering has to be at least as good as what G+ gives you and a little better in some ways if Facebook-Skype-Microsoft is going to provide real competition and a real alternative. Right now, it looks more like a desperation play by Facebook, which responded to the buzz surrounding Google+ by hastily implementing a borrowed video chat capability that Facebook by itself can only dream about.

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