With Silicon Valley’s most important internet conference of the year about to start, expect the love-in with Facebook to reach a new level of intensity. Since May, when it opened its APIs to let other developers build their services on top of its social network, the murmur of approval for Facebook in the Valley has grown steadily to a deafening din. In the latest confirmation of his new standing, founder Mark Zuckerberg will get the prime slot when the Web 2.0 Summit starts in San Francisco on Wednesday afternoon.

How fitting, then, that Rupert Murdoch will be on hand to remind the Valley of the attractions of his own social networking site. In a carefully choreographed appearance that avoids making Murdoch play second fiddle to Zuckerberg, the News Corp founder will get to address the Web 2.0 crowd over dinner later in the day. He will be accompanied by MySpace head Chris DeWolfe, who began a charm offensive from his Los Angeles base this summer to win back support in the Valley.

It seems amazing that an internet service that has been this successful should have been forced into such a defensive position. To hear some in the Valley talk about it, MySpace is fast becoming the Yahoo to Facebook’s Google. The disdain in which it is held is reminiscent of the Valley’s former contempt for AOL, another wildly popular service that was once deemed to have completely missed the technology boat.

In case it is needed, DeWolfe has a reminder up his sleeve of the sort of power that MySpace wields. On Wednesday, he will announce a partnership with Skype to let MySpace users embed the internet voice service into their profile pages. Skype will get the chance to reach MySpace’s 110m users. In return, MySpace will share in any revenue that Skype makes from selling its "premium" services on the social network.

This is a clear demonstration of the strategy that has led many in the Web 2.0 world to turn their noses up at MySpace. Neither side will say whether there is any exclusivity to the deal, but it clearly favours one communication service in return for a cut of the action. MySpace says it won’t block its users from continuing to add "widgets" to their pages to link to other rival services, but it obviously hopes that the deeper integration with Skype will make this the voice service of choice on its network (couldn’t eBay have tried something like this rather than buying Skype outright?)

Linking two networks as broad as MySpace and Skype sounds like it could have strong attractions - particularly since the two say there is very little overlap at the moment between their users bases. That should give the Valley’s MySpace naysayers something to think about.

October 16th, 2007 in Internet | Permalink