MySpace and Skype are partnering. The partnership was recently announced and will bring together two of the most popular Internet services. MySpace, which is the social network currently owned by the News Corporation, and Skype, the Internet-based telephone service owned by EBay, struck a deal which will help in the continued growth of both services.
MySpace will be incorporating all of the Skype features into it’s newly branded instant-messaging software, beginning in November. All members of the social networking site will then be able to conduct online text chats with one another. In addition, users will be able to download the latest version of the Skype software, which will enable them to communicate with each other and with all other users of the Skype network via free calls. These call features will amount to what can be considered a giant leap forward in the functionality and usefulness of the already functional and useful MySpace.
Interim chief executive of Skype, Michael van Swaaij, feels that the partnership is an obvious fit for both the world’s largest social network and the world’s largest voice network, and is likely to further fortify the already robust foundation of both companies. Skype has a total of 220 million users world wide, with most of them being outside of the U.S. By contrast, the majority of MySpace’s 110 million active users around the world reside in the United States. A study done by Nielsen NetRatings concluded that there is only a slight overlap in that 6.7% of Skype users also make use of MySpace’s current messaging system. The social network stands to gain millions of members through the partnership. Skype will benefit from the deal by gaining a healthy amount of new users through MySpace.
The revenue resulting from MySpace members making use of the Skype pay options and features, will be equally divided between both companies. Some of these pay options and features include land lines, mobile phones and voice mail boxes. The exact ratio of the revenue split has yet to be determined.
Currently there are about 25 million members who use the MySpace instant messenger. This number is close to the amount of people using Microsoft’s, Yahoo’s and AOL’s instant messaging software respectively. The combined total users of all four instant messaging services rises to slightly above 100 million people. Most of the the features of all four instant messengers rival one another, and the partnership is likely to further benefit both Skype and Myspace by having the voice feature added via Skype, to the MySpace instant messaging software. This is the one component that will allow MySpace instant messaging to catch up with Microsoft’s, Yahoo’s and AOL’s instant messaging service, each of which already have a feature allowing users to make voice calls.
Although Skype is solid and could continue to thrive on it’s own, EBay did acknowledge that they overpaid when purchasing the company back in 2005, by more than 1 billion dollars. The expanded market made available to Skype as a result of the MySpace deal, is likely to help finish offsetting that cost rather quickly.
The MySpace/Skype partnership is sure to positively impact both parent companies involved. To what extent it will benefit the two industry giants is unknown, but the companies can only gain from such a deal. This deal is a perfect example of smart business on a grand scale.
