The End of Skype's Freeconomic Era

Skype's Freeconomic Era is over - Torygraph:

Josh Silverman, the chief executive of Skype, the popular internet telephone service, is “seriously considering” launching third party advertising on the service, The Telegraph can reveal.

This was predictable the minute they were no longer part of eBay:

The service, six months on from the creation of its new board – which saw eBay sell 56pc of the company to Silverlake, an investor group, while retaining a 30 per cent stake – and the rest returning to the founders, serial web entrepreneurs by Niklas Zennstrom and Janus Friis (as part of a complicated legal dispute settlement), is ramping up its premium offerings to generate additional revenue streams.

There are only 3 ways of making money in the Freeconomic model - VC money, a subsidy from a rich patron, or Ads. VC fundings isn't going to happen and eBay has turned off the tap. (See our analysis of Freeconomic Fail starting here).

Will it work? Our experience with mobile ad based services is that it they get a fairly small audience in richer countries, much bigger in less wealthy ones. To my mind though the real opportunity is in small payments for those still very expensive services such as international and conference calls. Also, expanding into mobile is a good plan as there is another type of subsidy.

We shall watch this space with interest....