So, you should think of Conversation Ads as a way for Skype to generate fun interactivity between your circle of friends and family and the brands you care about.

This morning, Skype announced they were adding Conversation Ads to audio calls on Windows.

Spoiler: this is a pretty stupid move and will harm the Skype brand and impact user trust in Skype.

Firstly, let’s examine how the ads look, so we can get an idea of what we’re dealing with:

As Ars Technica says, “Can you spot the ad in this Skype call? Hint: it’s the giant thing on the right”. It’s hilariously bad. It’s the same size as poor Beth Wade’s face. At least she seems to look okay about being compared to a Magnum icecream ad.

Why won’t somebody think of the usability!

The idea behind Conversation Ads, versus the ads that Skype currently displays in a small window in the bottom left of the main menu, is that they’ll spark a new conversation topic about that ad, as it’s right there where users are staring.

As most people are wont to do on phone conferences and whilst using Skype, people will stare at the screen whilst holding an audio conversation. It’s human nature to direct our conversation towards a face. In an audio-only conversation where there is no face to stare at, we’ll seek out something that represents the person that we’re communicating with. It’s why you’ll see people talk towards a spider phone whilst a phone conference is happening.

Now, with Conversation Ads, you’ll be talking to Beth and staring at the screen but will be distracted by Magnum, enticing you to play games for icecreams. Sorry Beth, what was that, Skype just threw another ad in my face. I highly doubt users will be so blown away by this new ad being displayed that they will suddenly want to tell Beth all about that ad.

In fact, people don’t trust online advertising much at all. So you’re probably more likely to dismiss the ad, or worse, create a negative connotation with the brand being advertised. You might also begin to develop a negative brand association with Skype itself.

You just know that this was a ‘feature’ that misguided product owners have added to try and suck some more money out of the Skype product that they (Microsoft) bought for $8.5 billion. It’s certainly not a feature that consumers want. It just highlights that no-one actually went out and looked at how real-life users were using their service (that good old idea of usability testing), and measured what the effects were on the trust and usage of Skype (or if they did, they’re not sharing it with us. Maybe the short-term profit/long-term cost ratio was too good to pass up). Perhaps marketers were the ones pushing for it - but if marketers sign up for this approach, they’re just going for the old-world approach of ‘just get eyeballs on our brand’.

I think Skype and Microsoft (the driver for this boneheaded move) have totally missed the point of the Skype service. It’s a phone service, and trying to modify the nature of the call, even if it is in a roundabout way is only going to turn off consumers. Any change to the service only gives more enticement to users to evaluate other options.

It’s not as though Skype is alone in copping Microsoft’s barrage of dumb ideas. ‘Interactive’ (I use the word here very loosely) ads are coming to Xbox as well. You’ll have to use Kinect to dismiss the ads by waving to vote on a stupid poll about deodrants, for example. One hopes that this won’t be the case for Xbox Live Gold customers, but I wouldn’t hold my breath. I can’t wait to hear what the Internet has to say about that idea.

In which you sacrifice tomorrow’s product for today’s money

What’s a little bizarre about the push behind this feature is that Skype is a profitable company. Way back in 2010, Skype had over 124 million customers, and of that, 8.1 million paying customers who made Skype a tidy $800 million in profit. Those 8.1 million customers represent 6.5% of the user pool. Imagine if you could increase that to 7% or 25% - at approximately USD$97 revenue per user, that would boost profit to $3 billion dollars (based on 25% paying customers). And at the time of acquisition, Skype had over 663 million users. That’s a lot of people to convert to paying customers.

That increase in profit could go some way to supporting improved infrastructure or just returning profits to consumers. Part of the reason Skype went to Microsoft was to take advantage of their large infrastructure, as well as integration to other services, such as Xbox. There are hints about Skype integration for Xbox and I could see many possibilities for encouraging users to purchase additional Skype services to allow for the new features, such as video chatting or ambient gaming ala Google Hangouts style. Imagine if having a Skype Premium account could mean seamless chats between different platforms.

By pursuing a decent freemium strategy, in which your free users get a full-featured free service (such as Skype-to-Skype calls), and your paid users get extra features (Skype out, Skype in, group video chats, etc.), Skype built a widely-used, profitable business. But introducing ways to annoy your user base is unlikely to win you any hearts and minds. What they should do is look to find new features for premium users that encourages free users to drop a few bucks and make the switch (or even just buy some credit).

Who’s that spying on your profile

Creepily, Skype will begin to use what they call ‘non-personally identifiable demographic information’ to target these ads towards you. There’s an opt-out option buried in the Privacy menu, but it’s hard to imagine that everyday moms and dads calling their sons and daughters overseas will hunt this out and turn it off.

Targeted advertising isn’t the worst thing in the world ever, but it’s a silly move in a world in which more people are becoming nervous about how large organisations are using our data and are looking for solutions that stop them tracking our online movements.

Anyway, if you’re creeped out by it, you can apparently turn off the personalisation of ads by going to the Privacy menu in Tools -> Options of Skype for Windows. You can also opt-out of other Microsoft personalisation by going to the Microsoft Advertising site.

Help me, I want to get off this Skype

There’s a couple of ways that you can avoid these ads:

• Switch to Skype on Mac or a different platform. At the moment, these ads are only being displayed on Skype on Windows.
• Buy some Skype credit. It seems that users with credit or subscriptions will be excluded from this intrusion. So basically, free = screwed.

But by far the most effective way to tell Skype you don’t like this idea is:

• Switch off Skype and start using something else entirely. Google Hangouts and Apple Facetime both provide a comparative service. FaceTime is available on Mac, as well as iOS devices on WiFi. That’s going to change with iOS 6, which will allow iPhone 4S and iPad 3 devices to work with FaceTime over mobile networks.

It will be interesting to see what happens. In John Gruber style, I suppose I could make some future claim chowder and claim that this kills the Skype platform here and now (as my title would suggest). In the short to medium term, it’s unlikely to change much. A lot of people rely on Skype for communicating, both personally and professionally. A lot of these people only use Skype because it’s prevalent, with low barriers to entry and free (I’m one of those people, we use it extensively for communicating at client sites).

But I would suggest that as this gets into more platforms, and becomes more intrusive (can’t you just imagine Microsoft salivating over the chance to get ads into video chats), more people will seek out other alternatives and move off the Skype platform. Just as simple as it was to get onto Skype, it’s just as easy to move somewhere else.