Facebook and Google Both Looking at Acquiring Skype

Reuters reports that “wo sources with direct knowledge of the discussions” say both Facebook and Google are separately mulling over a merger with Skype. This comes after Skype decided to delay its initial public offering.

These sources say Facebook CEO Mark Zuckerberg has taken part in discussions regarding a Skype acquisition, as well as reaching out to Skype about a joint venture. One source says Google has been in early talks for a joint venture with Skype as well.

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 U.S. technology company this year.

While Skype’s IPO is expected to raise about $1 billion according to several sources, a deal with Facebook or Google could be valued at $3 or $4 billion according to one source.

Skype is very popular, boasting 124 million users last year, with 8.1 million being paying customers. The problem for them is that both Google and Apple have stepped on their toes, along with a number of other smaller companies. As the competition heats up for video calling, Skype’s value in an IPO drops. Investors are also worried about the huge number of non-paying users Skype carries.

Analysts say that a merger with Facebook might make the most sense as Google already does video and voice calls. Both Facebook and Skype stand to gain a lot from such a partnership. Facebook would expand its portfolio of social features while gaining ground on Google due to the sheer number of Skype users. Facebook is also a standard application on most smartphones.

“This is very synergistic,” said Trip Chowdhry, an analyst with Global Equities Research. “It puts Facebook two steps ahead of Google because of the number of Skype users.”

“In your social network, you will now have another very compelling service — Skype,” he added.

Skype has already changed hands a couple of times and it looks like a merger or acquisition may be best for their future in this case. What do you think?

via Reuters