Skype Acquires StartUp GroupMe, Will Provide Group Messaging Service

Skype, the online phone giant, has moved to acquire New York-based startup GroupMe, allowing it to enter the group messaging service market.

Skype hopes to provide a global multi-modal and multi-platform communications experience. GroupMe's application lets users text and make conference calls with circles of friends or colleagues.

The start-up, however, faces growing competition from heavyweights like Apple, Google and Facebook, which are launching new smartphone messaging services that include group messaging. Now, Skype will challenge Facebook’s Messenger service and Google+’s Huddle.

Skype and GroupMe have a shared vision of creating applications and experiences that are the daily communications choice for a billion people. We will continue to seek the top talent and technology to make that vision a reality, said Skype CEO Tony Bates. The GroupMe team has created an incredibly sticky group messaging experience that works across mobile devices and platforms, making this a perfect addition to the voice, video and text products in the Skype family.

The deal was confirmed as Microsoft is still in the process of seeking approvals from regulators to seal its $8.5 billion acquisition of Skype. The deal was approved by the U.S. Federal Trade Commission in June, but Bates said it still requires approval from the European Commission.

“This acquisition is another step towards our vision to provide a global multi-modal and multi-platform communications experience,” Bates wrote in his official Skype blog. “It complements our existing leadership in voice and video communications by providing best in class mobile text-based communications and innovative features around group messaging that enable users to connect, share locations and photos and make plans with their closest ties.”

Microsoft said in May it will acquire Skype for $8.5 billion and the deal will be followed by integrating Skype into Xbox 360, Kinect, Windows Phone and Office 365. GroupMe’s application may also help Microsoft strengthen its hold over mobile offerings while it expands Windows Phone 7’s capabilities.

GroupMe, founded last year, is one of many startups building wireless services that help people communicate in private groups over cellphones. The company said its service currently sends nearly 100 million messages a month.

“This has been a remarkable year for GroupMe, and we believe that this is a big win. And not just a big win for GroupMe and our amazing investors, but also for New York City,” the GroupMe team wrote in its official blog about the deal. “As part of the deal, GroupMe will remain in New York, team intact, working on our standalone application. The major difference will be that we will now have access to Skype’s 175 million monthly connected users. 175 million people. That’s a very big deal.”

Steve Martocci, GroupMe's co-founder, said integrating GroupMe into Skype is a great opportunity and will accelerate the execution of its vision tenfold, the official Skype site said.