Skype, one of the (if not the) most popular video conferencing applications out there, has long run on free conferencing and chat, with some paid services including connecting to telephone numbers. They were in the news last year as then-owner eBay promised an IPO to spin them off in H12010. Then they sold most of the company, but that deal was challenged by a lawsuit from Skype’s founders. Eventually, eBay settled the deal, leaving the founders with 14% of the company, the new buyers 56% of the company, and eBay 30%.
But apparently they’re struggling for income and their existing paid services just aren’t bringing in enough. Last year, eBay wrote Skype down last year (and an impairment charge two years ago)—suggesting the company never lived up to eBay’s expectations in the deal. Now that they’re (mostly) on their own again, Skype is contemplating advertising on its signature free services.
In an interview with The Telegraph, CEO Josh Silverman explains that the company . . . is challenged by its desire to keep Skype-to-Skype calls free and to maintain the quality of service. As a result, the Skype team is “seriously considering” including ads from third parties in order to continue to operate the service free of charge.
Silverman says the ads will be done in a “tasteful way.”
Just last week, Skype announced up-to-five-way video calling, which will be a free service at first. After a few months, they’ll charge for that service, apparently thinking the service would be mostly utilized by business Skypers. It’s set to premiere this week.
What do you think? What should Skype do to make more money?