Skype buys video sharing start-up for reported $US100 million

VoIP market leader Skype has purchased video conferencing start-up Qik for a reported $US100 million, with the company intending to add video recording, sharing and storage functions to its existing products.

The announcement was made at the Consumer Electronics Show in Las Vegas, where a range of updates for Skype’s existing products have been announced, along with integration with technology from other manufacturers, such as television sets.

Skype chief executive Tony Bates made the announcement, and would not reveal financial details. However, Business Insider reports the deal is worth over $US100 million and could be worth as much as $US150 million.

“Mobile and video are becoming the way to communicate,” Bates said. “We really think we’ve reached a tipping point with video… Qik is a complement to what we do.”

Qik launched in 2008 as a piece of software that would allow users to share video through smartphones and other websites like Facebook and YouTube. The service itself allows users to record and stream videos in real time, and already has over five million users.

The company describes itself as an “innovative and flexible” solution to capture and share video across mobiles and desktop computers. “Videos can be shared in real time or stored so moments can be viewed later, allowing for video messaging, sharing and archiving,” it says.

The company has 60 employees with offices in California and Russia.

Bates pointed out that over 24% of all minutes spent on international voice traffic last year were handled through Skype, and 40% of those calls were using video, providing a good basis for the purchase.

Skype says that the acquisition will “accelerate Skype’s leadership in video by adding recording, sharing and storing capabilities to Skype’s product portfolio”. The purchase also means Skype won’t have to spend time and resources developing a technology of its own.

“Together, Skype and Qik will focus on providing a richer, more integrated experience that will allow people globally to share experiences in real-time video across different platforms, as well as, store those moments so they can be viewed anytime later.”

The use of video-chat has been growing in large part to the growth of Skype, but also due to the introduction of front-facing video cameras on smartphones and the introduction of chat services such as Apple’s FaceTime.

“Qik has worked very hard to solve complex problems that allow millions of people every day to take advantage of sharing their lives with those people who are most important to them,” Qik chief executive Vijay Tella said in a statement yesterday.

The announcement also comes as Skype has launched a new group video-chat service as part of its enterprise program.