According to this article it wasn't about video but free Internet phone calls.
As Tom Anderson (founder of Myspace) stated on Google+ (https://plus.google.com/112063946124358686266/posts/g2zmxn1L...) Myspace had one-on-one video chat back in 2004 but I guess without the help of Skype and without the necessary broadband penetration it wasn't all that useful.
first time i saw video from camera being immediately rendered inside a window on computer screen in 1995 (it was in Russia where we were technically noticeably behind the West) It still blows my mind what video chat is still not ubiquitous, and that a company adding video chat feature is a matter to notice.
Video chat isn't a technical problem, it's a social problem. I have multiple ways to video chat almost wherever I am, but I almost never want to video chat. When was the last time when you wanted to video chat but couldn't? That's never happened to me.
I don't want to video chat that often but the reason is that the only way to do so is through Skype (hard to convince anybody to move to a different service) and the video and voice quality is usually really bad so yes, I do think it is a technical problem (maybe not just software though).
I'd love to video chat with my baby daughter in the mornings because i go to work before she wakes up. But cannot because due to bandwidth issues, its an awful experience. So count me as an adopter if and when video chat ever becomes good!
I think that younger generations are the same, if not more so. Texting is far less intimate than a phone call, and a video chat is more intimate than a phone call. People are going in the other direction for most of their daily social contact.
As Tom Anderson (founder of Myspace) stated on Google+ (https://plus.google.com/112063946124358686266/posts/g2zmxn1L...) Myspace had one-on-one video chat back in 2004 but I guess without the help of Skype and without the necessary broadband penetration it wasn't all that useful.