Facebook Launches Skype-Powered Video Chat

The addition of Skype to Facebook will not only help both companies grow toward their mutual goal of reaching 1 billion users but also marks the beginning of a new era in social application development, Facebook CEO Mark Zuckerberg said Wednesday.

“Social networking is in this inflection point now,” said Zuckerberg, arguing that the metric used to define success for Internet companies in the last six or seven years—connecting people—is becoming obsolete.

“I actually think the driving narrative for the next five years or so is not going to be about wiring up the world, because a lot of the interesting stuff has already been done,” he said. “It’s about what kind of cool stuff you’re going to be able to build … now that you have this wiring in place.”

Three of those cool news things were unveiled at a livestreamed product announcement at Facebook headquarters Wednesday morning in Palo Alto, one of which is video chat, powered by Skype.

Anyone familiar with Skype or iChat will recognize the interface immediately—it allows one-on-one video chatting. This one does so between friends on Facebook. The tool has been integrated into Facebook’s chat product, a redesign that was another product announced Wednesday.

The partnership with Skype, Zuckerberg said, represents the beginning of a trend in application development in which “best-in-class” companies will turn their attention to one fundamental question:

“How are we going to offer our product and do it in a social way on top of social infrastructure?” he said. “That’s the way stuff is going to play out over the next five years.”

Skype CEO Tony Bates said that his service already processes 300 million minutes of video every month, accounting for more than 50 percent of its traffic during peak times.

“This is going to be propelled to a whole new level, working with Facebook,” he said.

In addition to video chat, Facebook also announced Wednesday a group chat feature that allows friends to easily invite multiple participants into one chat room.

These three products—video chat, group chat and a redesign of the chat interface—are the first of what Zuckerberg promises will be an entire season of recently completed projects.  

“Today marks the beginning of what we’ll call launching season 2011,” he said.

The primary drive behind this round of development, he said, is the exponential growth his company has seen in the amount of content shared by users, as opposed to simply the growth of new users.

Pointing to a line graph on a screen behind him, Zuckerberg noted that the number of items on Facebook being shared by its users is doubling every year.

“That kind of exponential growth is really profound,” he said. To illustrate a point he said most people have difficultly grasping, he explained that a single piece of paper folded 50 times would reach the moon and back more than 10 times.

Citing Moore’s Law—that the number of transistors that can be cheaply integrated into a microchip doubles every two years—Zuckerberg said he sees the growth of the social ecosystem following a similar trend.

“You can kind of plot this out into the future and say, well, if this is what people are sharing now, what types of apps are going to have to exist three or five years from now?” asked Zuckerberg.

In 2004, people shared about .1 things per day, he said, as he pointed at another chart. “We’re right at the elbow of the curve,” he said. In five years, he prophesized, "all the apps you use are going to be dramatically different."