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Comment by eykanal | Hacker News Reader

- Absolutely no one will see this and think, "Wow, ads, THAT'S what Skype was missing. I'm glad I have a better product now."

- Maybe a couple of people will think, "Meh, another ad-based monetization business plan. I'll live with it."

- Many people will see this and think, "Ads? Forget this, I'm using gchat/facebook/facetime/other free video service without ads."

This, to me, is what is wrong with all basing your revenue on advertising. Skype's mention that "this will make Skype more engaging and useful" is laughable. Basing a business plan on advertising is a decision to provide a cheaper/free service at the cost of deliberately worsening the UI and, ultimately, the user's experience with your product. That's a serious trade-off indeed.

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It's hard to do advertising well where the interests of all parties are aligned. I think Google did a very good job with this, since the ads it serves you are more likely to be genuinely helpful to what you are trying to do. Most Internet ad models revolve around interrupting the user--being blind to the user's goals and point of view. Compounding this problem is that users often find it creepy when ads do know about their goals and point of view. Someone needs to creatively disrupt the current "off-topic interruption" vs. "on-topic privacy invasion" ad paradigm.

I would like to point out that facebook.com does have ads, just not on the call like Skype, not sure on the other messenger apps Facebook has released recently

They do, but they're unobtrusive to the point of being borderline useless to everyone, user and advertiser. See the recent news about GM and others stopping their of facebook ad campaigns.

Most peoples' aversion to advertising ends the second they have to pay cash instead. Basing a business on advertising is a rational response. Remember the incredible tantrum on HN when Chargify started charging money?

As for the free users, well, fuck them. Nobody owes them free services or software. The implicit contract with someone providing you something for free is that they're monetizing you and your interaction with their service some other way. (My new favorite quotes: [1])

[1] http://blog.earlh.com/index.php/2012/06/two-quotes-about-the...

edit: @eykanal: I meant fuck the free users whining about advertising.

Ordinarily I'd agree, but a huge part of businesses like Skype is the network effect. In other words, Skype is useful because basically everyone has an account and knows how to use the software. So the attitude towards free users has to be more subtle than 'fuck them'.

Skype is mature from a user base perspective. Holding off on monetizing free users until network effects start to bring real pull is a great game plan.

It's definitely a rational response. Not all rational responses make for successful, profitable companies, though. Ads are often a poor business decision, as they can cheapen both your product and your business's image.

As to your "fuck 'em", if that's your attitude, why bother servicing them at all? Providing ads is simply a way of enabling free users. Stop the ads and the free users, you'll be better off. There's been a lot of links about that, here's one: [1].

And I love those quotes.

[1]: http://blog.pinboard.in/2011/12/don_t_be_a_free_user/

> Basing a business plan on advertising is a decision to provide a cheaper/free service at the cost of deliberately worsening the UI and, ultimately, the user's experience with your product. That's a serious trade-off indeed.

Actually, ads on Skype probably would have been fine, if they'd done it many years ago. When Skype was new, it was an incredible deal. Voice chat! To anywhere in the world! For free! (Or a small price if you want to use the phone network at either end.) That was such an incredible deal that nobody would have minded if ads were included as part of it -- what else you gonna do? Pay long-distance rates to the telephone company?

Nowadays we're all spoiled and accustomed to the fact that we can video-chat with anyone at any time for no money and no ads, so this sounds just plain annoying.

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