Facebook Launches Video Calling with Skype

Lately, Mark Zuckerberg has taken to using anecdotes to provide context on the latest announcements. Today’s was about an elderly neighbor who stopped him on the street to tell him that he hoped the rumors about Skype video calling were true, because he wanted to use it to call his grandchildren.

It may not be a subtle message to a press conference full of techies, but it’s an important one: don’t overthink this.  Now, 750 million people (yes, that’s the new membership number) can make video calls to each other using Skype within their Facebook session. The launch comes amid recent focus on the competitive impact on Facebook of Google +, including “Hangout,” and Mark Zuckerberg’s presence thereon.

Facebook Video Calling is very simple. The interface is clean and intuitive, and it supports most browsers. Unlike Hangout, Facebook Video Calling is as yet limited to one-to-one calling, which Facebook and Skype say is by far the most popular. It works only on desktop/laptop devices and requires a one-time download of software to begin (even if you are a Skype user).

A SUBTLE SHIFT OF EMPHASIS

We’re starting to see evidence of a subtle but important shift in emphasis from Facebook. Mark Zuckerberg’s opening remarks focused more on the momentum of sharing activity than member growth, which signals a greater–and more mature–emphasis on the “social” aspect of social networking than we’ve seen in the past.

Here are the three trends that Zuckerberg said are shaping the company’s current thinking:

  1. Application Proliferation  — As more companies build social experiences, apps will continue to create the potential for different types of relationships among users. This trend specifically  puts Facebook in closer competition with Google, because of Google’s momentum on the apps front.
  2. Mobile Sharing — Both Facebook and Skype have seen intense traction in mobile, and Facebook has previously said that they are focusing intently on the mobile platform.
  3. Social Norming — While trends 1 and 2 are critical, trend 3 brings everything together. Social norming refers to how people think about sharing, particularly in small groups. For example, Zuckerberg sees less potential from “friending” than from group formation, saying, “a huge number of our users will never go out of their way to add someone as a friend.” While understanding the nuances of social behavior hasn’t historically been a strong suit for Facebook, they clearly realize they have to nail it now to maintain their advantage.
WHAT TO EXPECT
  • For Facebook. According to Zuckerberg, expect to see more launch activity this summer and into the Fall. In typical Facebook fashion, the announcements are likely to be fairly disparate, but watch for news around apps, mobile and friend/group management, if the trends above are any indication. Look for more evidence of deeper integrations with Microsoft, as Facebook and Microsoft team up against a common enemy: Google. The challenge for both companies will be to stay focused on the users: a work-in-progress for Facebook and a historic weak spot for Microsoft.
  • For Skype. This is an interesting move for Skype, because it shifts emphasis away from its platform and onto Facebook.  The natural question is whether this diminishes Skype’s ability to monetize its own platform. Said Rick Osterloh, VP Product, Skype, “We want to power the world’s conversations, and the way to do that is to go where the users are.” While (given that the company is in the midst of a not-yet-closed acquisition by Microsoft) both parties were understandably careful when navigating questions related to futures, they did suggest that there may be monetization options down the line. The next natural question is whether the Facebook partnership is one-of-a-kind, or whether it signals increased emphasis on partnering with other platforms by Skype, especially within the context of Microsoft. Said Osterloh, “Anything of this scale is unique, and it’s something we can work on together for a long time.”  To maintain relevance, Skype will need to protect its history of technology innovation and neutrality–neither of which are historic strengths of its acquirer–when it becomes part of Microsoft.
  • For Google. Facebook’s announcement–and the selection of the trends that Zuckerberg discussed–is a small shot across Google’s bow, but it also highlights the ways in which these platforms will both threaten and diverge from each other over time. Facebook clearly has the installed base advantage, the social networking experience and the immersive experience that Google lacks.  At the same time, Google + has some very real advantages in its group and friend management capabilities, its app portfolio/expertise and, of course, its trump card–the ubiquity of the search bar. While it’s still early days to predict a victor, expect more skirmishes as–for the first time in a while–we see real competition in the social networking market.

If they’re smart about it, both Facebook and Google will learn from each other, resist the impulse to be overly distracted and stick to innovation. That will best serve the market and–most importantly–the many millions of people who use their services.

About susanetlinger

Industry Analyst at Altimeter Group
This entry was posted in Social Graph, Social media. Bookmark the permalink.

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