The digital business week

9 May 2011

A digest of the top business and technology news stories from the past week.

Facebook and Google court Skype about possible JV or sale

Facebook and Google are realising VoIP giant Skype’s potential as an online advertising player and the two internet giants are each trying to interest Skype in a joint venture.

According to various reports, Facebook CEO Mark Zuckerberg has been in discussions about potentially buying Skype.

Google has held talks about a potential joint venture with Skype.

It is understood Skype is in strategic talks with other companies, as well as Facebook and Google.

It makes sense. Facebook’s social network can do pretty much everything, from hosting and sharing video and apps and news content, but the missing link is the ability to do voice and video chat.

For Google, it would be a defensive mechanism to protect its online advertising empire despite the fact its Gmail and Google Talk services are enabled for voice and video conferencing.

Facebook accelerates toward US$100bn valuation

Facebook is tipped for a spring 2012 IPO and is believed to be hurtling towards a US$100bn valuation by early next year because its profits are growing faster than the company had predicted.

According to reports, Facebook is likely to earn more than US$2bn in 2011 before interest and taxes, and sparking more expectation it will pursue a public listing next year.

The valuation would put Facebook ahead of technology stalwarts like HP, Amazon and Cisco.

According to the Wall Street Journal, which cites people who have seen Facebook’s latest financial figures, the IPO could happen as early as spring 2012.

Twitter buys TweetDeck for US$40m

Twitter has reportedly bought social media client TweetDeck in a deal valued at US$40m, right from under the nose of another social media client firm UberMedia, which was close to buying TweetDeck for US$30m.

Developer Ian Dodsworth set up TweetDeck in London in 2008 and 19pc of Twitter’s 200m worldwide user base uses TweetDeck.

It is understood TweetDeck was bought via a combination of Twitter cash and stock.

The acquisition is the latest episode in a battle between Twitter and UberMedia, a company that makes popular Twitter-related products.

UberMedia makes popular apps, like UberSocial, Echofon and Twidroyd, that allow users to access their Twitter feeds.

However, in recent months, relations between Twitter and UberMedia have become strained. In February, Twitter shut out three of UberMedia’s apps because they violated Twitter company policies and UberMedia had to change the name of its popular UberTwitter app to UberSocial.

According to TechCrunch, the acquisition of London-headquartered TweetDeck was defensive as Twitter could not allow UberMedia to garner so much power.

DoneDeal reaches 2m unique visitors a month

Figures released by independent internet audience measurement service Ireland Metrix have revealed more than 2m people are visiting DoneDeal each month looking for value online.

Founded in 2005, the classified ads website has experienced significant growth over the last year with almost 150,000 adverts now active on the site at any one time. Some 75,000 new items are advertised on the site each month and the cash amount for items sold on the website in March alone came to more than €76m.

AOL Q1 profits plunge 86pc to US$4.7m

Internet portal giant AOL, which in recent months paid US$315m to acquire The Huffington Post, has reported a 17pc decline in Q1 revenues of €551.4m, down from €664.3m a year ago.

Profits at the online giant fell a massive 86pc from €34.7m to €4.7m. This included US$27.8m in restructuring expenses related to the acquisition of The Huffington Post and US$8.4m in relation to acquisitions made in 2010 and during the first quarter of this year.

The company suffered declines of 11pc in advertising revenues (US$313.7m), a 24pc decline in subscription revenues (US$215.4m) and other revenue streams (US$22.3m).

Global display revenue grew 4pc, marking the first quarter of year-over-year growth at AOL since Q4 2007.

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