As an IPO looms, Skype is looking for new revenue streams that will help continue its growth and improve its financial prospects. Monday, it unveiled the next big revenue generator: ads on its Skype Windows desktop client.
Skype said in a blog post Monday it will begin rolling out test ads in the U.S., U.K. and Germany this week from big brands including Groupon, Universal Pictures, and Visa. The ads, which will be adjusted over time, will appear in the home tab of the Skype client at the top of the application. In an attempt to preserve the user experience, the ads will be limited, so users will only see one brand a day. Skype said it won’t use pop-ups, but will try to target ads to users to make them relevant using non-personally identifiable demographic data. Users can opt-out of those targeted ads if they choose. Skype said it has already tested some ads with Rdio.
The move to advertising has been tossed around for a long time and actually seems a bit overdue. Skype said it is almost wholly reliant on SkypeOut revenue, which made up 86 percent of its $860 million in revenue last year, according to its updated S-1 filing. Skype knows it needs to diversify its revenue if it wants to grow and have the money to invest in new features, and it needs the money to keep Skype-to-Skype calls free. By tapping advertising as a new revenue stream, it can ease its over-reliance on SkypeOut, which the company identified as a risk factor.
Skype recently announced it has hit 29 million concurrent users, and said in its S-1 that its overall user base is up to 663 million. It has a lot of people communicating, increasingly through video, which makes up 42 percent of calls. It’s an expensive setup, but it’s also a great opportunity for advertising. Fortune last year reported that Skype could rake in $200 million from advertising, especially for video chats, which could host ads alongside the chat. Overall, Skype said its users made 207 billion minutes of Skype-to-Skype calls last year. All that engagement can be monetized well if done with some restraint.
That seems to be Skype’s main concern with advertising. The company said it is moving slowly because it believes the user experience is paramount. And it’s still not clear to Skype how big an opportunity it has on its hands. Here’s the important language from the S-1:
…it is still uncertain what level of revenues can be generated through advertising. Furthermore, we may face difficulty in successfully implementing advertising on certain platforms, such as mobile devices. Finally, our users may respond negatively to receiving advertisements through their Skype software client, which could negatively and materially affect user engagement, our Skype brand and our results of operations.
Skype said in addition to advertising, it will ramp up its enterprise efforts and is also looking at gaming and virtual goods as other potential revenue sources. The advertising effort is Windows-only for now, but if all goes well and Skype avoids an uproar, expect it to appear on Mac and mobile platform as well.
For all its success, Skype is still in need of some revenue diversification. It’s getting there with these ads, which should slowly beef up revenues. A rumored deal with Facebook to provide video chat could also provide some oomph with a boost of new users. Look for more announcements as the Skype money-making machine starts to crank into high gear.
Related content on GigaOM Pro: (sub req’d)
- Report: The Consumer Video Chat Market, 2010-2015
- Mobile Operators’ Strategies for Connected Devices
- How to Market Your iPhone App — A Developer’s Guide
Babies are big business. Nobody wants to be a bad parent, so there is great pressure to be sure you have not just the essentials, but the best essentials for your new baby. If you're a first-time parent, you have no experience to guide you. The helpful salesperson at the local Baby-Mega-Super-Store will be more than happy to provide you with a mile-long list of what, you're assured, are really and truly the essentials.
Well, I'm here to tell you different.
My fourth child is scheduled to make her appearance in just a couple of months. My oldest child is not yet five years old. For the last several years of my life, I've been a card-carrying, dues-paid, full-fledged member of the baby club. Many of those "essentials" you see for sale just turn into extraneous stuff that you have to keep cleaning, moving, and, at times, paying for. Save yourself some money and space, and stock up only on what you'll actually use. Here's my list of needs. (See also: Which Baby Products Are a Waste of Money?)
A Place to Sleep
A decent crib, a good mattress, and enough bedding to keep baby comfortable are essential. You don't, however, have to buy a crib new to get a good one. Search your local classifieds for a used crib; just make sure you get one that isn't more than five years old. It should be sturdy, with small spaces between the slats and all hardware intact. Most cribs that have been made within the last five years convert easily into toddler beds.
Salespeople at the Big Baby Box Store will scare you with talk of scoliosis and try to get you to buy the premium mattress for your crib. I bought the mid-grade; it's obviously firmer and nicer than the cheapest option, but it's also as firm and nice as I need it to be for peace of mind.
As far as what to put on the mattress, keep it simple. Bumper pads are not necessary and can even be a suffocation hazard. Same goes for big, fluffy comforters, pillows, stuffed animals, or piles of blankets. For the first six months or so, you'll want to have a mattress cover, five crib sheets (frequent spit-ups and diaper incidents make extras really nice to have around), and a couple of lightweight blankets. When the weather is cool, dress baby warmly so she won't get cold during nap time and night time.
A Place to Play
For the first several months of your baby's life, mobility won't be an option for him. This means, basically, that you can plop him down on a blanket, and he's not going anywhere. This also means that baby doesn't really need a swing, a bouncer, a play center, a play pen, a walker, a baby papasan, or any of the other play area options out there.
The caveat on this is when your baby does start to get mobile. Rolling, scooting, and then crawling will introduce a whole new world of possibilities. At that point, it's nice to have one or two confined play areas handy, so you can keep your baby entertained and safe while you need to do something else. But you don't need all the options.
Before you buy, test out what your friends have; go have a play date and put your baby in your friend's swing. If he's screaming in five minutes, don't spend $100 on a swing. If he's happy, it might be worth the investment. I've had the best response from my children with a very basic baby swing, a little reclined baby seat, and a Pack 'n Play that serves as a confined play area and can be moved to any room of the house, the yard, a friend's house, or Nana's house.
A Way to Travel
A safe car seat and a sturdy stroller are investments worth making for your new baby. You'll get the best deal on new items by purchasing a car seat/stroller combination; those will start at about $150 new and go up from there. The same advice applies to car seats and strollers as to cribs. If you're purchasing used, make sure the car seat/stroller isn't over five years old, and inspect it thoroughly to be sure it's in good condition.
The only other "travel" item I've used over the years is a front-pack baby carrier. I got a good brand, and it's lasted through heavy use with three babies. These seem to be mainly a matter of personal preference, however; if you can't picture yourself walking around with a baby strapped to your chest, don't buy one.
Clothes
Brand-new babies, prone to random bouts of spitting up and explosive diapers, can go through quite a few outfits in a day. Stock up on essentials that are comfortable for your baby and easy to get on and off: ruffles, ribbons, bows, zippers, buttons, and extra clothing "decor" tend to make the dressing process complicated and long (not fun when your baby is screaming), and, generally, the more "stuff" on an outfit, the less comfortable your baby will be in it.
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