Facebook unveils Skype video calling (Update 2)

"We think this is awesome because we're using the best technology that's out there for doing video chat with the best social infrastructure that's out there," said Facebook co-founder Mark Zuckerberg.

The new Skype feature comes with improved group text chat which allows for multi-person conversations and a camera icon that can be clicked on for instant one-on-one video calls with friends.

Speaking to reporters at Facebook headquarters in Palo Alto, Zuckerberg said he "wouldn't rule out" group video calls at Facebook in the future but that the "vast majority" of video conversations are one-on-one.

Google+, which the Internet search giant launched last week, includes a group video calling feature called "Hangouts" which has proved popular among early users.

Zuckerberg said plans to add Skype to Facebook began before Microsoft announced in May that it was buying the Internet voice and video leader for $8.5 billion dollars.

He portrayed online social networking as being at a point where its momentum is unstoppable and said Facebook's focus is now on fun or functional software applications that can be built on its platform.

"There is this clear arc where the world generally believes (social networking) is going to be everywhere," Zuckerberg said. "In a matter of time it will be billions, whether it is us or somebody else doing it."

As ranks of social network users grow, the number of updates, pictures, videos and other content shared is rocketing, according to Zuckerberg.

"We have 750 million users now and it is still growing quickly," he said. "But the thing growing faster is the amount of sharing per user."

The amount of content shared at Facebook has soared to four billion things daily.

Along with building its own programs to enhance the social network, Facebook will work with entrepreneurs and partners such as Skype.

"It is really gratifying to see this product on the leading social network out there," said Skype chief executive Tony Bates. "There is no greater place to get to the Web than inside Facebook.

"This makes a lot of business sense as well," Bates continued. "We want to be as ubiquitous as possible and great things will happen from there."

Forrester Research analyst Sean Corcoran said the partnership with Skype "is another step for Facebook to solidify its position as a central platform for people to connect and communicate.

"It will also accelerate the use of a next generation form of communication in video chat by introducing it to hundreds of millions of people," Corcoran said.

Skype is added to Facebook with easily installed Web browser "plug-in" software and no financial deal was struck between the companies, Zuckerberg said.

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Facebook CEO Mark Zuckerberg (L) watches a demonstration of the new Facebook video chat during a news conference at Facebook headquarters July 6, 2011 in Palo Alto, California.

"We have a really good relationship with Microsoft," Zuckerberg said.

The Skype-Facebook alliance, and deepening Facebook ties with Microsoft, came as Google mounts its own social networking challenge.

Google dominates Internet search but the Mountain View, California, company has failed to make inroads on the social networking front.

Google+ is being seen as its most serious effort yet.

Besides group video calling, Google+ lets users separate online friends and family into different "Circles," or networks, and to share information only with members of a particular circle.

One of the criticisms of Facebook is that updates are shared with all of one's friends unless a user has gone through a relatively complicated process to create separate Facebook Groups.

Google and Facebook wage a fierce battle over online advertising dollars and both companies are seeking to become the chief gateway to the Internet.

"I'm not going to say a lot about Google+" Zuckerberg said while fielding questions. "All of us have spent a little time on the service."

He viewed the emphasis that Google and other firms are putting on expanding social components as validation that Facebook is on the right track.

(c) 2011 AFP