At the same time, to Steven’s point Skype could also create a direct channel for these links (calls) via auction (ebay??). Their size, installed base, and brand recognition gives them some advantages in gaining trust of advertisers as a marketing channel.

Regarding the other question about why would advertisers pay YPs? Because they’re aggregating the traffic (or in this case calls). SMBs aren’t going to do it on their own, just like SEM. They want someone to do it for them but still provide reporting.

In reality, this is kind of piggyback’s on skype’s technology, which is i think the basis of the question (what value are YPs providing here?). The answer is they’re providing value by underwriting the links, making them free for users which ramps up the call volumes.

That’s what they’re going for anyway. I’m not convinced it’s a slam dunk but i do think it’s interesting. Particularly the part about turning all of these existing phone numbers — that pop up everywhere — into ad units in their own right.

The other point is that YPs won’t sell it to SMBs as getting calls from skype — they’ll simply make the phone ring. They’re moving towards that proposition in lots of ways — getting paid for leads regardless of source (though we all know there are different levels of quality for leads from different sources;, a whole different subject).

I can hardly imagine anyone to consider a Skype call more convenient. Skype is used to save on international calls. Skype for local calls makes absolutely no sense to me.

Users will also shy away from this (at least in Europe) because they will assume this service is about data gathering (e.g. giving Skype identity to business, getting annoying calls on Skype in the future).

On top of that, last I’ve heard yellow pages companies know that any kind of performance based advertising just proves to the customer that they pay too much for the ads.

So the question becomes, What is the YP bringing to the table here? Essentially they are subsidizing a skype call, making it free for the user (otherwise, skypeout subscription required). The degree to which these links are called out as being free is something i haven’t been able to talk about because of Skype’s IP – pending patent protection.

The next question is, as you alluded to: Is the alternative of picking up the phone to dial the number (the traditional way)easy enough already that it’s not necessarily a problem in need of a solution(from a user perspective)?

This will be revealed in trials and likely come down to different regions where Skype is more or less saturated.