Skype Adds Advertising To Windows App

Seven months after filing papers for an as-yet unscheduled initial public offering, Skype on Monday said it would begin this week to roll out advertising on the Windows version of its video communications service.

The ads -- from businesses such as Groupon, Visa, and Universal Pictures -- will appear on users' home tabs, said Doug Bewsher, Skype's chief marketing officer, in a company blog. Skype began piloting the ads with partner Rdio over the past couple of months, and will continue testing them as it rolls out the advertisements on a wider scale, initially focusing on the United States, the United Kingdom, and Germany, he said.

"We believe that advertising, when done in the right way, will help us continue to invest in developing great products," said Bewsher.

At first, Skype plans to show one ad per brand per day in each market where Skype is selling advertising, he said. The company did not say how long the initial plan is expected to last. Although ads originally are slated to solely appear in the home tab of Skype for Windows, the company may experiment with ads in other areas of the site, Bewsher said.

"The ads won't interrupt your Skype experience. You won't suddenly see annoying pop-up ads or flashy banner ads in middle of conversations," he said.

Skype plans to use non-personally identifiable demographic information such as gender, age, and location to target advertising and ensure users see only pertinent ads. However, users can opt-out, preventing Skype from sharing this data with advertisers by going to the software's Privacy tab in Tools, and clicking on Options, the company said.

"The Skype experience is paramount and we are committed to learning as we go, continuing to evolve the offer for advertisers and to developing great products that enable you to connect whenever you're apart," Bewsher said.

Although some users voiced support for advertising on Skype's free product, they said they hoped the ads would not appear on the paid service. The blog posting did not address whether ads would be limited to only users of Skype's free product.

"The majority of people who will see ads are our non-paying users. We’ll test and evaluate what is appropriate for both our paying and non-paying users. Advertising will help us continue to develop our business and provide value to our users, as we invest in an ever-improving Skype user experience, and more features and products across more platforms," a Skype spokesman told InformationWeek.

"Right, I don't mind you serving up ads to those who are free users and not paying for their service. But I have a subscription and pay you money for your service, I do not wish to be bombarded by ads," wrote user Sindrealmost. "Admittedly I rarely use the desktop client, more often than not I am on one form of mobile device or other. But please for us who pay for your service, no ads."

Added Alexander Hanff: "Do you not think this is going to annoy those of us who pay for Skype? I can understand subsidizing Skype for people only using VoIP but for people who pay for Skype Out and other services, it is going to be annoying. As one of the latter, I know I will be looking for an alternative service now especially given that you have chosen to go the Opt-Out route on the sharing of personal data."

In fact, Skype's addition of ads could provide an opportunity for other voice-over-IP (VoIP) services such as Google Voice, Vopium, Vonage, Fring, Truphone, and Nimbuzz.

"Good to know -- I'm never updating Skype again. If you prevent earlier [ad-free] versions from connecting, I'm switching to GTalk/Google Voice. Permanently," said Skype user Urania-arg, in a comment on the Skype blog.

In August 2010, Skype listed its IPO at $100 million. The company, however, did not name the number of shares, nor did it include an IPO date or the symbol it would use as a publicly traded company.

Last week, Twitter raised users' ire when it released the Quick Bar for iPhones, which includes Promoted Tweets. Quickly nicknamed the "Dick Bar" after company CEO Dick Costolo, many users were upset by the prominent position and the bar's rotating menu of promoted trends and planned ad messages. Twitter responded quickly with a less invasive design.