TMT BLOG: The Battle in Video Messaging Software

Google announced this week that it was launching Duo, a new video calling app for your smartphone. Its aim is to compete with some serious industry heavyweights including Apple’s FaceTime, Microsoft’s Skype and Facebook’s Messenger.

Video calling technology is seriously hot TMT property inspiring some interesting M&A. Microsoft acquired Skype for an eye watering €9bn back in 2011 and Yahoo bought start-up OntheAir in 2012. More recently SnapChat paid €115m for American video calling service Looksery in 2015 and high profile Napster and Facebook investor Sean Parker relaunched Airtime, a group video and messaging app back in April 2016.

So what are Google’s chances of success in an already crowded space?

Google claims Duo’s unique selling points include Knock Knock, a feature which allows users a glimpse of a caller before answering, as well as its ability to work in low Wi-Fi areas. Unlike FaceTime it also works across different operating systems although critics point out that this means it relies on people downloading the app. Apple has the advantage every one of its new devices having FaceTime installed while Facebook also has a 1.7 billion user base to tap into.

There are also questions of whether video calling has truly taken off in the way many thought it would. The barrier may be psychological rather than technological. Anyone who has made a video call and seen themselves on the screen will know how awkward it can be. Equally in the fast pace of modern life it does not allow users to do two things at once, in the way texting or making a phone call can do.

Yet the number of new entrants and the appetite in the M&A market has shown no signs of slowing down. Investors still believe in the concept and are willing to pay up.  The question of who comes out on top?  Only time will tell.