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.