Skype, the half a billion users strong Internet telephony giant, confirmed in a statement Thursday its intention to acquire Qik, a popular service that lets folks easily upload and share video clips recorded on their mobile phones. The transaction, pending customary approvals, is expected to close by the end of the month.
Although neither company would divulge the value of the deal, multiple sources pegged the transaction between $100 and $150 million. Interestingly, both companies share two well-known investors: Marc Andreessen and Ben Horowitz.
The deal puts Skype in an interesting position where it can enhance the recently released video chat feature which now works between desktop and mobile clients. Skype wrote in a statement that the Qik deal will help them add "recording, sharing and storing capabilities" to their products by taking advantage of Qik’s media streaming technology known for optimizing video transmission over wireless networks. Already about 40 percent of Skype-to-Skype calls are happening over video, Skype noted.
Redwood City, California-based Qik has 60 employees and ended 2010 with five million users. The company was founded in 2006. The Qik service had gotten off to a great start upon launch, partly because it was a no-brainer for uploading short clips taken with a cellphone, but also thanks to their clever marketing.
Demi Moore and Ashton Kutcher, the first celebrities on the service, had been releasing their spicy party videos on Qik on a regular basis, prompting millions to follow suit and join the service. Today, the Qik service works across 200 handsets, including a variety of Android phones, iPhones, Symbian phones, Blackberrys and Windows Mobile platforms.