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I'm wondering if it's the Skype technology itself has a problem. I haven't looked into it too extensively, but through experience, group calls (without video) in Skype tend to be choppy, and filled with problems (people dropping off, etc).

In comparison, I've paid for a 200 slot Ventrilo server for the last 3 years. While this is centralized, it's on a shared server, and I doubt the majority of NA/Euro connections wouldn't rival at least a 20-slot Ventrilo server in terms of hardware and bandwidth. Ventrilo GSM 6.1 44khz codex transmits amazing quality, regardless of whether I'm speaking to 1 other person, or 199 other people.

Does anyone actually know the reason for this?

My instinctual understanding is that Skype has a distributed nature, and the hand-offs/re-syncing were primarily to blame.

I don't have any concrete basis for this conjecture.

Skype one-to-one is peer-to-peer. Your video data goes straight to the other person.

Skype group video chat is run through their servers. The aggregate the video sources on their side and send those back out to each participant. So, there's an inherent cost of that much data (n*(n-1), I believe) and the server itself that Skype needs to pay for.

Audio group chat is easier because the resulting audio streams can be overlaid on top of each other for everyone in the same group. So, if 3 people are talking in a 10 person chat, it's 3 inbound streams and just 10 outbound streams, not 30 outbound. Video can't be overlaid like that (at least not without it looking weird :P)

If there is no group chat on FB then I think they are loosing by a point. People don't use Skype's because it is not free while for example iChat allows you to do video chat for free (for limited number of people). Now Google will allow it for free, and my expectation is that people will start using it. This may be one big plus for Google+, and a way for them to attract more people.
> If you want to have a one on one video chat, and your friend list is hosted at Facebook, the new Facebook video chat is a near perfect product.

Michael seems to be ignoring the fact that GTalk has better video chat than skype (and has for years).

Yes, but I also have quite a number of friends who do not use Gmail for one reason or another, so FB's video chat is a welcomed.

I also don't understand what's with all the hate towards FB because they are implementing something other services have.

That's true, but given the integration GTalk has with G+ now, most of my G+ contacts have also appeared in my Talk contact list primed for video chat.
I've been able to video chat with EVERY contact I have through a range of services (Gtalk/Gmail, Skype, MSN Messenger, iChat and even my Nokia N95) for years now, and I still don't feel the incentive to do it - so that's why I'm not too excited about the announcements from FB today.

Group video chat, however, is another beast. You can hangout with multiple friends together or do team meetings with your colleague from home. I can see that work.

So, for now, G+ has the advantage here. I'm still waiting for Skype to drop it's ridiculous pricing.

I definitely understand that, but I think that's only one use case. The case I am most familiar with is mine. I moved to Canada 4 years ago, right at the beginning of high school, and right at the beginning of FB going big mainstream. This meant that I met a lot of people since then, and since it was the period when FB was getting big, I would just friend people on Facebook. Before FB chat came out, if I needed to chat with them afterwards, I would get their email from their profile, or if it wasn't listed I'd ask around. When Chat came out, I stopped doing that and I would just chat with the people I didn't have on MSN/Gtalk on FB. I'm sure there's tons of people in the same/similar situation that I had.
Definitely not my experience.
So...how long has Facebook been withholding video chat from their users? Sad and sorry. Thank you Google for giving everyone a superior product. Keep it up!
Not sure why that's a fair assumption. I'd have an easier time believing that they've been working on this and rushed it out the door because of Google+, but even that's just conjecture. You don't drum up a partnership and integration like this in two or three weeks.
The conclusion is that there is no overlap? To paraphrase "A Princess Bride":

You keep saying "It's No Contest." I don't think it means what you think it means.

But once again, all my friends who I'd ever want to video chat have Facebook, and I still can't get my + invite to work. For a majority of users, Facebook will have done it first, even if + really did.
The pairing between Microsoft and Facebook is getting tighter.
Microsoft - the dominant tech behemoth who everyone loves to hate & Facebook - the worlds current social network crack that everyone hates to love.
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With Facebook and Google racing to beat each others free products, could this mean Microsoft may have just wasted $8.5 billion?

This is a real question, I don't really use video chat much at all.

edit: Or at least massively devalue their investment.

Giggles's just angry about losing the Nortel patents.