Microsoft is planning on ramping up the amount of advertising free users of Skype see while they are making video calls and using the rest of the service.
Talking yesterday at the announcement of Microsoft’s acquisition of Skype for $8.5bn, Steve Ballmer, Microsoft’s chief executive said that he could see huge revenue potential in the online video chat service, especially in the video advertising area.
Tony Bates, Skype’s chief executive, who will now become the president of the Microsoft Skype division, said: “We think advertising is a powerful monetising stream for us.”
Ballmer than revealed that the acquisition had come about after both companies had been discussing Skype using Microsoft's sales team to ramp up advertising on the internet telephone service.
Neil Stevens, Skype’s vice president and general manager of its Global Consumer team, would not reveal exactly how the increased level of advertising would affect those making video calls but did say: “The key thing will be not to get in the way of the calls…We need to find a clever way of doing it [inserting adverts].”
Currently Skype users see limited advertising messages on the top of the video screen when using the service on a Microsoft powered laptop. However, it has yet to take advantage of more lucrative video advertising.
Bates also batted off claims that other companies, rumoured to have been Google and Facebook, had also tried to acquire Skype in the last few weeks. He said: “We were very focused on our IPO [Initial Public Offering] and had an unsolicited offer [from Microsoft].”
Skype has been downloaded 700 million times and has 10 million paying customers.
Ballmer joked that lots more things in life would be better and easier if conducted over video calls, such as school meetings and family reunions. “There are better ways to do these things…and Skype and Microsoft will power them together,” he quipped.
Analysts say Microsoft’s purchase of Skype, the largest deal in its 36-year history, is part of a broader push into the consumer world.