Skype Experiments with Ads, Finally

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Skype Experiments with Ads, Finally

Over a year ago I asked, why isn't Skype showing eBay ads? After hearing eBay thought there was no synergy between ecommerce and communications I was too flustered to talk. I am still horrified that eBay doesn't realize the potential they have with Skype and seems to be in a rush to unload it. Two years ago I suggested a laundry list of ideas Skype should seriously consider. The company is implementing many of these slowly but to reiterate, this is what I said regarding advertising:

Show some ads: Let's see if I understand the situation. You have over 5 million users on your service almost every moment of every day. You need to increase revenue. Your answer? Show no ads. If I were eBay I would be flashing product listings in front of Skype users as often as possible. If this doesn't make sense, why not show Google ads like everyone else in the world? It is tough to see where this isn't a $100 million/year revenue opportunity - this amount may seem high but think about how long people use Skype each day and consider you can flash new ads in front of users constantly. Moreover, probably $90 million would flow to the bottom line. eBay's P/E ratio is currently about 40 so this amount of earnings could translate into about $3.6 billion in market capitalization. Not showing ads is something I can't conceivably understand.

Now the company is experimenting with click-to-call ads and you know what, it is about time. But again, if you own one of the largest ecommerce sites in the world and your existing business model is under siege from Amazon, Google and others and you have a weapon in your arsenal which gives you an unfair advantage, why sell it?

If the unloading of Skype isn't the basis of a shareholder lawsuit and/or there isn't a suit which suggests the company doesn't have a clue how to integrate two extremely synergistic companies, eBay execs should throw a party.

But then again, if Skype is partially owned by eBay and goes public, perhaps shareholders are all better off as eBay seems to not be capable of doing anything with it. Skype on its own or with new partners is potentially a lot more valuable than as a part of eBay. The move towards advertising by Skype is late, very late and should include regular click ads as well but better late than never.



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