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Skype may be one of the most important companies on the internet. Not only has it created a way for hundreds of millions of people around the world to communicate cheaply, it's found a way to make a mint doing so.

The company generated $400m in the first half of 2009, most of which came from its SkypeOut offering. But ahead of an IPO that it hopes will raise $1bn, the company is creating some ad inventory in its desktop client.

Today, users in the US, UK and Germany will start to see ads on the home tab. Some of these ads will be targeted based on non-personally identifiable demographic data that users voluntarily provide to Skype.

Not surprisingly, Skype's display ad inventory is sure to appeal to marketers, and already the company has blue-chip buyers in brands like Visa, Disney and Volkswagen. Part of this appeal: size.

According to AdAge, Skype's CMO, Doug Bewsher, a former agency head, "pointed out that though people are spending a lot of time on today's socially oriented sites, ad placements on those sites are typically small and out of the way." Skype's new ads, on the other hand, take up a good chunk of the space on the home tab of the desktop client.

They also will reportedly support Skype-based calls, giving advertisers the ability to create direct response opportunities within the app. This could be interesting. For instance, a company like Visa could use such functionality to field inquiries and applications from prospective cardholders.

But what's good for advertisers isn't necessarily embraced by users, and it's unclear how Skype users will react to the ads? Naturally, there's already some skepticism.

While Skype plays up the quality of its audience and ad offering, it's pretty clear that the move to display ads in the Skype desktop client was driven more by the company's impending IPO than a genuine belief that the ads would improve the Skype user experience.

On this front, The Register perceptively observes that, based on Skype's revenue and user count, the company currently has an ARPU of well under $2 per user. So while ad revenue might make Skype's income statement look a bit healthier, Skype still has a long way to go before it looks like a solid telecommunications play.

As we've seen with the Twitter #dickbar fiasco, in-application advertising can be tricky, particularly when it's prominent. For companies like Skype and Twitter, which have left an indelible mark on communications in the digital age, the lesson is clear: ads may be easy to add, but it's going to take a lot more to maximize the best opportunities.

Patricio Robles

Published 8 March, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

Mark Fletcher

Mark Fletcher, Ecommerce Insight Manager at Republic

There are increasingly good formats out there. Please please please can we now see the back of 468x60 and 120x600 formats which allow about as much flexibility as advertising on the back of a used postage stamp!

over 5 years ago

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