11 Comments

Summary:

Wal-Mart is going to start selling nine Skype-certified hardware devices (and by extension the Skype service) in all 1800 (or roughly half) of its stores. The deal also includes Skype pre-paid cards. Wal-Mart is the first retailer in the U.S. to offer Skype’s pre-paid cards that […]

Wal-Mart is going to start selling nine Skype-certified hardware devices (and by extension the Skype service) in all 1800 (or roughly half) of its stores. The deal also includes Skype pre-paid cards. Wal-Mart is the first retailer in the U.S. to offer Skype’s pre-paid cards that will be sold in $20 denominations.

The move is an effort by Skype to boost its U.S. revenues. Skype, which had about $79 million in first quarter revenues relies heavily on the overseas markets. The Wal-Mart deal is one of the many efforts by the company to goose up its revenues and meet the targets that will help Skype cofounders get the $1.5 billion that is tied in earn outs.

Skype’s mainstream retail push is coming at a time when the service is showing signs of maturity. In first quarter of 2007, there “was the marginal 1% increase in the Skype-to-Skype usage to around 7.7 billion minutes.”

Despite all the growth in minutes and users, eBay’s $4.2 billion buy is on a treadmill – it has to keep adding more users in order to what amounts to squeezing blood from a stone.

The downside of this mainstream push by Skype is that it comes with the baggage of expectations. It will be viewed as a low-cost telephony service, and mainstream users will expect 911 services, which if not available can cause legal headaches. Regardless, this move can put pressure on Vonage, and further siphon away long distance minutes from the big phone companies.

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  1. 911 is a huge issue. Is Skype working on it?

  2. Hey Om,

    It’s 4:14am in Bentonville, Arkansas. I’m curious as to when this news was released. Also, are there any details on the specs of the devices?

    O.O.

  3. I wonder how much of a difference this will make to the growth of Skype. I’ve seen Skype phones in my local Wal-Mart (and bought one) for more than a year now, so Skype may not get much more from this deal.

  4. Robert Dewey Monday, May 14, 2007

    Interesting…

    One problem I see right now is that most consumers aren’t technologically inclined enough to mess around with such hardware. It’s far easier for them to simply plug in a $9.99 phone into their existing phone line, fed by their $19.99/mo cable-provided VoIP.

    If the Skype hardware process is cheap and easy enough, then I could see people switching – $2.49/mo, who can beat that?

  5. Robert Dewey Monday, May 14, 2007

    Correction (to my post): You need SkypeIn, so you’re looking at $5-$6/mo total. Still not bad.

  6. Marc Beharry Monday, May 14, 2007

    I like it!

    The big phone companies have been gouging us for years.

    Between mobile service costs and long distance they have made too much money.

    And I used to work for a few of them, so I have really seen it…

  7. Libran Lover Monday, May 14, 2007

    The only thing keeping me from switching to Skype right now is the lack of 911 service, and to a lesser extent, lack of number portability. Otherwise, their value proposition is awesome, compared to other VoIP service providers!

  8. Nick Hawkins Monday, May 14, 2007

    You know it’s a sign when your technology is hitting mainstream when it shows up on the shelves at Walmart.

  9. This is huge for Skype. They want a piece of the long distance pie. I think because they don’t offer internet access they are better off w/o 911 service. Too much headache.

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