It has now been confirmed, that that service was the launch of Video chat, in conjunction with Skype.

This launch will now make video calling available to all of Facebook’s 750 million users, and will give a wider user base to Skype.

The cooperation between Facebook and Microsoft can also be expected to increase as Skype has recently been bought over by Microsoft.

While people may speculate that Facebook has launched this service as a counter attack to the launch of Google Plus, it is quite obvious that Facebook must have been planning and discussing this deal with Skype for quite some time. The timing may just be coincidental.

As of now, the video chat function is only available on the desktop. Mobile users may have to wait a while for this service. There has been no information about this service being made available on the mobile in the near future.

It also remains to be seen how popular video chat becomes in the near future. It is quite possible that a large number of users may consider video chat as an intrusion of privacy, unlike communication in the form of text messaging.

Speculations have been running high since then in anticipation of what that ‘awesome’ new product could be.

Reuters initially suggested that this new product could be mobile or tablet related, as Zuckerberg had mentioned that the Seattle office has played a major role in the development of this product, and it is a known fact that their recently improved mobile site was developed in Seattle. If that is so, it could well be the launch of an iPad App.

It is also being speculated, that Facebook may now be ready to launch their new photo-sharing app for the iPhone.

Another possibility being considered is ‘Project Spartan’, which is an HTML-5 based competitor to Apple’s App store.

The official invites for the launch are now out, and contain two chat icons placed very conspicuously. This has now given rise tot eh idea, that the launch could have something to do with a new video chat service powered by Skype.

Facebook has been working on a desktop component of video chat, built on Skype. This service will integrate several features of Facebook and Skype.

If this is indeed the new product to be launched, it will help Facebook to tide over the recent launch of Google Plus, which has generated a lot of interest amongst users. It will also give Skype access to Facebook’s wide user base of over 750 million users.

The launch of such a service will also please Microsoft, which has recently bought over Skype.

In effect, users will now be able to use Skype software to make video calls using a set-top box and a special remote control.  The remote control will also have a keyboard, allowing users to chat. It will not matter whether the other party is using a phone, a computer or a TV to make the call.

Skype-enabled TV sets have already been available in the market since about a year.  However, this is the first time a cable network operator will offer such a facility.

The trial of this new scheme is expected to start in a few months’ time. Details regarding the cost of the software involved are not yet available. However, it is reasonable to assume, that it would cost less than a Skype-enabled TV.

Once the service is functional, when users receives a call, they will be able to view the caller ID and decide whether they want to talk with the caller, have a video conference or just chat. The service will allow users to make low cost Internet video calls while watching programmes on television.

This deal has come following the recent purchase of Skype by Microsoft for a record $8.5 billion. It will also renew user interest in cable TV connections, possibly reversing the trend among users to switch away from traditional cable to other options such as Netflix, Hulu and other Web-based services.

This is Microsoft’s largest takeover deal yet, and it is hoped that this deal will place them in a better position to deal with the onslaught of laptops, mobile phones, tablets and other devices.

Microsoft CEO, Steve Ballmer, made this announcement during a recent conference in San Francisco. The VoIP service will be paid for fully in cash, to become a part of Microsoft.

Services on Skype will be integrated with Microsoft’s existing platforms such as Xbox Live, Kinect, Outlook and Hotmail. Microsoft hopes to be able to put this technology to use for purposes such as video chats on Xbox, mobile conferencing through the Windows phone, audio chats between business associates and many more person 2 person services. This should enable Skype to reach a much larger audience worldwide.

Steve Ballmer has said, “By bringing together the best of Microsoft and the best of Skype, we will empower people around the world with new technologies that should bring them closer together.”

Earlier, Skype had been bought over by eBay, but the arrangement did not work out very well and Skype sold their major share shortly thereafter. It is a known fact that Skype had been on the lookout for someone to take over the company. It is believed that Google and Facebook were among the companies that showed an interest in the acquisition.

While Skype’s main offering of free voice and video calls over the Internet has been the main driver of its growth, the service has been making substantial losses over the last 5 years. After the amalgamation with Microsoft, the Skype user base will jump from 107 million to 660 million, which should help improve the balance sheets.

Microsoft has also said that they will continue to support Skype’s non-Microsoft based platforms such as Mac OS X, Linux, Android, Blackberry, iOS and others.

For some time now, educators have been making use of Skype to connect with each other. To help them further, Skype had launched this service in beta last December. It is now a full-fledged social network available across the world.

• Skype in the classroom

The service was developed with the help of teachers who were already using Skype for educational purposes. Through Skype In The Classroom, teachers from different parts of the world can get in touch with each other, to broaden their knowledge of a given subject or project., through an exchange of ideas and information.

Educators can find each other by filtering based on certain criteria such as subjects of interest, location and age group they teach.

During the beta phase itself, the service was available across 99 countries and was used by 4,000 people. Now, they have over 8,400 teachers on board with 290 project discussions.

Interested teachers can sign up using their Skype id, and create a profile by filling in their details, which will be stored in a directory. Others can then go through this directory to find teachers from the same field. They can also locate others in the same field by searching for specific keywords.

Discussion about Anti-Bullying project posted on Skype in the classroom

Educators will be able to enhance their own knowledge of a subject and then impart it to their students. The possibilities are endless. The service will also make it possible for students to be addressed by guest lecturers or even to have interactive sessions with students from other institutes.

Teachers in Peru could setup video conferences with teachers in England to teach their respective classes English & Spanish! Others could collaborate on anti-bullying and other social efforts that concern most educators.

A similar service, called EDge, was launched last year by The Association for Supervision and Curriculum Development, which is a primarily American organisation. However, Skype’s worldwide user base might help make it a more popular choice.

Users must install the new Skype version 5.0 for windows to avail of the new facilities that were launched last week. After downloading the new version of Skype, users can import contacts from Facebook into their Skype address book by signing in to their Facebook accounts. They can then send an SMS or make a call to their Facebook friends. The Skype-to-Skype service via Facebook will be free of cost.

What makes this integration really interesting and far superior to many other Facebook integrations is that users will also be able to check their Facebook news feed, post status updates, like updates and add comments directly from Skype.

Facebook news stream on Skype

If users include a phone number on their Facebook profiles, they can receive calls from other users through Skype. This can be a call to a landline or a mobile number.

A new search feature will automatically shift the friends to the top of the listings. There are also plans to introduce a call conferencing facility for up to 10 people. This service will, however, not be free.

Ethan Beard, Director of Facebook’s Developer Network says, “We’re working with companies such as Skype to make it easy to find your friends anytime you want to connect.”

Call services are only available through the Skype interface. Users who have signed up to use Facebook on Skype won’t see any changes on the Facebook.com web interface.

This new service will be especially appreciated by those who stay far away from home, as they will find it easier and cheaper to stay in touch with friends and family.

In keeping with the basic concept of Skype, which has always been to allow users to make phone calls at no or minimal costs, this new service will allow users to call advertisers for free. The advertisers in turn will also be charged at very nominal rates.

The service has been called Click & Call Advertising With Skype.

Advertisers who choose to use the service will get their phone number highlighted wherever it is displayed online, with a blue button, saying “Free Call”.

A Click & Call ad from Skype

If any user clicks on the button, the Skype software is activated and the user is automatically connected to the advertiser for free. The new service is based on technology by Marchex.

Skype’s Director of Advertising, Andy Sims says, “Working together with Marchex, our objective for Click & Call Advertising with Skype supported by Marchex is to deliver a performance advertising tool that turns the Web surfing behavior of Skype users into calls to advertisers.”

Marchex COO Pete Christothoulou says, “Today, we are seeing a shift in the way consumers find phone numbers, the way they place calls and how those calls are paid for. As a result, coupling Skype’s reach with Marchex’s call advertising technology, sales team and service, we believe we can offer a high quality solution to large and small advertisers.”

Magpie is a pay-per-tweet service through which brands can pay individuals and companies to promote their products.

Nothing wrong with that. What many Twitter users find objectionable, though, is the fact that well known and established companies like Kodak, Adobe, Skype and Apple are paying consumers to advocate their products, or in other words, say something good about the company or its product in their Twitter stream, without actually disclosing that they’ve been paid to do so.

The obvious question such a system raises is, how much of this “appreciation” is genuine?

A lot of people would certainly be tempted to earn a few quid by endorsing a product, even if they have not actually used it, or worse still, they are not entirely happy with.

Magpie works on a keyword-bidding system. When the advertiser’s keyword matches the words used in a tweet, the advertiser can bid on it. The highest bidder will get to tap into that twitter user’s account to promote their products. Advertisers have the choice of bidding on a daily basis or on a cost-per-thousand impressions basis.

Users with more contacts earn more money through the Magpie system. An additional 30% commission is paid to Twitter users on the transaction fee for each new advertiser that signs up to advertising on the stream for a whole year.

According to ReadWriteWeb, most of these companies might not be directly involved in buying these tweets. It is more likely that their outside agents are doing so. The end result, however, remains the same in the eyes of the consumer.

Such false advertising will hurt these companies more than helping them, as people will start to doubt the integrity of their services and products.

Examples of sponsored tweets from Apple, Skype via Magpie

Google Voice users will be able to get transcripts of their voice applications as well as archive and search all SMS text messages that they have sent or received. Users will also be able to make free domestic calls and low cost international calls and use the Google Directory assistance service GOOG-411.

Google Voice

To begin with, Google Voice will only be available to current users of GrandCentral.

GrandCentral already provides many interesting facilities to its users, such as a single number that can call up to 6 lines, allowing users to be contacted via a single number that forwards calls to all the possible numbers they can possibly be reached on, including a home, mobile and office number; a central voicemail inbox that can be accessed online and the ability to screen calls by listening to voicemail while it is being recorded.

Voice transcription is done by a computer. The results are not yet perfect, as can be seen in the demo video below, but it is good enough to allow users to recognise the name of the caller and the gist of the message. Apart from the audio recording the message is also sent to the users email and phone via text message.

One can also make conference calls with up to 4 callers, through Google Voice. The caller just dials a Google number and the conference call owner adds them to the call.

At present, the voicemail service is free and international calls are as low as 2 cents per minute to call the U.K. Craig walker, Senior Product Manager for Google says, “Google doesn’t have a current plan to monetise the service. The mission is to make Google users happy.”

This new facility from Google is certainly going to give competition to Skype. It could also be perceived as a threat by a number of traditional and mobile telecommunications companies, and will at least prompt some providers to offer more add-on services for free.

GrandCentral users are already being sent instructions about how they can use Google Voice. Others interested in this service can send their email address to Google and they will be notified when the service is made widely available.

CNet reports that Skype and Nokia announced their partnership at the GSMA Mobile World Congress in Barcelona. The software for Skype’s Internet calling service will now be integrated on some of Nokia’s high-end smart phones. The first model to have this facility will be the N97, which is slated for a June release. The Skype service, however, will only be started in the third quarter of the year.

Once the service is started it will be integrated into the address book and users will automatically be able to see which of their Skype contacts are online. They will also be able to use its instant messaging service. This facility will enable N97 users to make calls over the Internet irrespective of whether they are using a 3G cellular network or a Wi-Fi network. All Skype-to-Skype voice calls will be free, while Skype to landline or mobile calls will be at low rates.

Sony Ericsson also announced a deal with Skype. Sony will provide a Skype panel on the Windows Mobile Xperia1 handset.

While this is great news for consumers, especially those who need to make frequent international calls, mobile network operators are not likely to be thrilled with this development. Free and low cost international calls via Skype would mean lower revenue generation for their own networks.

It is not impossible that networks such as AT&T, Verizon or T-Mobile may require the Skype service to be discontinued from handsets using their networks in the U.S.A. Three UK is one of the only major networks to have forged a relationship with Skype.
Skype’s chief operating Officer Scott Durchslag says that though they are starting this service with the high end phones, it will also be made available on mid-tier handsets in the future.

The rumors began after eBay CEO, John Donahue, said that Skype was a great stand-alone business, indicating that though the VoIP service is doing well, (its fourth quarter revenue increased by 26% over the third quarter, and it has over 405 million users worldwide with 30 million users being added every quarter) it was still not integrated into their core business, 4 years after they bought it for an astounding $2.6 billion.

eBay, on the other hand, is not doing too well during the current economic crisis. Their net profits fell to $367 million in the last quarter of 2008, compared to $531 million during the same period in 2007.

Jack Murphy an analyst for investment bank William Blair says “It’s important that eBay has opened the door to a buyer by talking about Skype as a stand-alone business. It would be best for eBay to get whatever cash they could for it and focus on their struggling core market business.”

According to Jim Friedland, senior Internet equity analyst at Cowen and Company, the highest offer eBay can expect for Skype is $1.6 billion.

According to industry sources companies such as Google, Yahoo!, AT&T and Verizon could all be potential buyers as they can easily integrate the VoIP service with their core business.

It is especially believed by some that buying Skype could be the logical next step for Google, as it already has various communication facilities such as Gmail, Google Chat and the Android mobile platform. Owning Skype could enable Google to offer a cheap VoIP-based mobile solution.

There are others who feel that Microsoft may be more likely to buy Skype as they are looking to increase their user base to boost search.

eBay, however, has neither confirmed nor denied any of the rumors.

Citizen Lab has come across a database, which has thousands of words, that are considered to be politically sensitive. Whenever a Skype message contains any of these words, it gets automatically blocked. The database on which these words are stored also stores the personal information of the users, including their IP address, username and phone number. The database is insecure and hence is publicly available, which is a blatant breach of security for the users.

According to Citizen Lab, there is a surveillance system in place, which selects and stores messages transmitted through online telephones, and text messages. The messages that get deleted may contain some commonly used words such as democracy, Taiwan, Tibet, Voice of America, milk powder, Olympic games, earthquake, Tiananmen and SARS. The database reportedly contains over 1,50,000 messages, and it is possible to identify all the senders and recipients by entering just a username.

The internet service provider Skype, which runs its services in China in a joint venture with the Chinese company TOM online, under the name TOM-Skype, says that they are aware of the filtering of data by the Chinese authorities, but are concerned by reports about the resultant breach of security.

Citizen Lab has enquired whether or not Tom online and Skype are cooperating with the Chinese authorities and if so to what extent.

President of Skype, Josh Silverman has said that it is common knowledge that that Tom Online follows procedures to meet the local laws and regulations, such as monitoring and blocking messages containing certain words, which the Chinese government disapproves of. However according to policy these messages are to be deleted. They will have to investigate to know if the policy has been changed to allow storage of these messages and why.

According to the report, Skype will be teaming up with mobile operator 3 from the end of November. They will release a fully integrated mobile phone that will mean free mobile to mobile phone calls for anyone swapping networks.

This should be good news for 3. Providing free mobile to mobile calls from anywhere in the world, in association with Skype, could cause all the other operators enormous pain.

Rattling the competition

Speaking to the BBC, Per Lindberg, a telecommunications and IT analyst at investment bank Dresdner Kleinwort said, “Whether they win market share depends completely on their competitors’ reactions.” He thinks a move such as this could prompt all the operators to cut their prices, “If Vodafone or Telefonica move to ‘all-you-can-eat’ then the situation may change.”

Skype’s phone could even be a threat to other new entrants such as Apple’s iPhone or Google’s rumoured GPhone. Sprint Nextel could also take over Vonage and integrate VOIP services into their products even more seamlessly than Skype can.

Three is the mobile business of Hong Kong based Hutchison Whampoa, better known in Asia and the USA for Hutchison Telecom and the Harbour Plaza hotel group. Skype was acquired by Ebay back in 2005 for $2.6 Billion. Recently, though, Ebay was publicly dissatisfied with Skype’s performance, when it was forced to announce to shareholders that it would have to pay an impairment charge of $900 million because it had over-valued the group.

If the Skype – 3 deal delivers on promise, it could prove to be a turn-around point for Skype as well as the sagging VOIP industry on the whole.

BBC Report: Skype teams up with 3