Skype aims to boost revenue with ads ahead of IPO

Plans to introduce advertising to Skype in an effort to boost revenue ahead of going public is on the way. This according to the hugely popular free internet communications service on Monday.

Skype, which bypasses the standard telephone network by channeling voice, video and text conversations over the Web, said the ads will appear only in Britain, Germany and the United States for now.

The introduction of advertising is Skype’s latest bid to increase revenue ahead of an initial public offering expected later this year.

The Luxembourg-based Skype, which was founded in 2003, announced plans in August to raise up to US$100-million by listing on the Nasdaq stock exchange.

“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 the Skype environment,” Skype said in a blog post.

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

It said initial advertisers include discount coupon site Groupon, Universal Pictures, and Visa.

Skype said ads will appear in the home tab in Skype for Windows “and we may experiment with ads in other areas as well.”

“The ads won’t interrupt your Skype experience,” the company said. “You won’t suddenly see annoying pop-up ads or flashy banner ads in middle of conversations.”

According to its IPO registration statement, Skype generated US$406 million in revenue in the first half of 2010 and had 560 million registered users. –AFP