Forget the browser wars. Social media is the new hot zone. A week after Google (Nasdaq: GOOG) introduced its Google+ social platform, Facebook fired back yesterday with a video messaging service built on Skype.
The idea is simple and in many ways compelling. Choose a contact from your list of friends and click on the video icon in the upper right corner of their page. Here’s a closer look at how it works. As you’ll see, there isn’t much difference between initiating a call and starting a text chat:
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Skype and Microsoft (Nasdaq: MSFT) stand to be the big winners here, since it’s Skype technology being used to power conversations and Mr. Softy, as owner, gets to collect whatever spoils come from the arrangement.
But if you’re Google, don’t you also have to love how quickly you’ve turned the tables on your chief rival? Google+ includes a video chatting service called Hangouts where it’s possible to visually (ahem) “hang out” with as many Google+ connections you can find.
To be fair, video calling isn’t new. Skype has had it for years, as has Vonage (NYSE: VG). Apple (Nasdaq: AAPL), meanwhile, has a Mac-specific service called FaceTime while 8x8 (Nasdaq: EGHT) has built a small business telephony suite that includes video conferencing, voice mail, call forwarding, and just about anything else you can think of.
So why do Hangouts and Facebook Video Calling matter? Pervasiveness. More people are connected via Facebook and Google services than any of the alternatives you see above. More friends mean more interactions, and more interactions feed a desire for more interactive features, such as video calling.
Battle of the social network stars
The techie in me enjoys seeing these two titans tussle. But as an investor, I’m equally aware that what happens in social media matters a great deal. Every time analog media such as TV and telephony goes digital in connected networks such as these, analog advertising -- i.e., broadcasting untargeted, impersonal messages to a largely uninterested world -- bleeds a little more.
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