Yes, ads are coming to Skype

Posted by Lydia Leavitt

Like all good things, the days of an advertisement-free Skype experience seem destined to end.

Yes, the company has announced it will start placing ads within the system for Windows users this week. Having filed for IPO in August aiming to raise $100 million, the ads appear to be part of a new monetizing strategy.

Skype has been testing the alleged "feature" for the past couple of months in a partnership with Rdio and is slated to roll out ads in the U.S., UK and Germany from major companies like Groupon, Universal Pictures and Visa this week.

"The Skype experience is our first priority, which is why we we’ve taken a lot of time working through and testing what kind of advertising would work best in [our] environment," the company explained in an official blog post.

Fortunately, Skype seems to be serious about preserving the user experience (at least for now), as it’s limiting the ads each user will see on the home screen to one brand per day.

The company will also avoid annoying pop-up ads, opting to deploy relevant targeted ads pulled from non-personally identifiable demographic data. Users will also have the option to opt-out of targeted ads if they so choose.

Skype made 86 percent of its $860 million dollars in revnue last year from its SkypeOut feature that allows users to call various phones from their computer for a small fee.

Still, the company knows that in order to grow, it must diversify its sources of revenue, which is why it’s tapping into advertising as a new revenue stream.

Last year, Forbes reported that Skype could make around $200 million a year in advertising, especially within video chats. With over 207 billions of minutes of Skype-to-Skype calls last year, that’s a whole lotta dough.

Nevertheless, Skype is slow to move on the plan mostly because it is still uncertain what level of revenues can be generated through advertising.

Furthermore, the company may face difficulty in successfully implementing advertising on certain platforms, such as mobile devices.

Finally, users may respond negatively to receiving advertisements through their Skype software client, which could negatively and materially affect member engagement.

Aside from the Windows-only advertising plan, Skype is supposedly looking into gaming and virtual goods as another source of revenue. That and a rumored deal with Facebook to provide video chat may improve revenue and boost Skype adoption by new users.

Personally, it doesn’t bother me to see ads within a service like Skype. Although ads are sometimes a pain when it comes to navigating through a system, if they keep the cost of the service down then I’m all for it.

Besides, almost every site is littered with ads already so it’s pretty easy to become completely blind to them.

(Via Gigaom