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Facebook, Google mull Skype deals

New York, May 5, 2011

Facebook and Google are separately considering a tie-up with Skype after the web video conferencing service delayed its initial public offering, two sources said.

Facebook chief executive Mark Zuckerberg has taken part in internal discussions about buying Skype, according to one of the sources. Another source said Facebook had reached out to the Luxembourg-based company about forming a joint venture.

Google has also held early talks for a joint venture with Skype, the second source said.

A Skype deal could be valued at $3 billion to $4 billion, the first source said. Skype's IPO is expected to raise about $1 billion, several other sources said.

The discussions are in early stages, and it is not clear which option the companies favour, the first two sources said.

Although an IPO is still in the cards for the second half of 2011, Skype remains in discussions with other companies, two of the sources said. If it goes through, a Skype IPO would be one of the most hotly anticipated debuts by a US technology company this year.

Securing Skype as a partner would expand Facebook's user base, help it grow in international markets where Skype is popular, and give its half-billion users another reason to remain active and connected to its online community.

Analysts say a tie-up between Facebook and Skype would make more sense than one with Google, which already has a similar service -- Google Voice. - Reuters




Tags: Google | Skype | social network | facebook |

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