During CES 2011, a "key Windows Phone 7" employee revealed that Microsoft is currently working on a FaceTime type application for the Windows Phone platform. The news was just one of many features outlined by the employee while explaining where the platform was heading in the near future.
According to the unnamed employee, the application is expected to be included in Microsoft's Live service so that it can be distributed and used across various Microsoft devices and platforms. There was also indication that the application may not arrive in time for Windows Phone 7, instead making its debut on Windows Phone 8. The employee also added that Windows Phone 8 may even require a front-facing camera.
To back up the Microsoft employee's claim, Neowin scored an additional screenshot submitted by ex-Microsoft Silverlight Program Manager Justin Angel. The image was taken from the Microsoft.Phone.Media.Extended.dll and highlights the use of a SelfPortrait Camera. This clearly indicates that Microsoft is working towards a front-facing camera application for the Windows Phone platform.
When asked why Windows Phone users would not just use Skype, the employee said that Microsoft's FaceTine competitor will "reach beyond the hand of Skype." Promises promises.