Optical/IP Networks

Skype's the Limit

11:35 AM -- With more than half a billion in revenues last year, Skype Ltd. is projected to top the $1 billion revenue mark in 2011. There were some 405 million registered users for Skype in 2008. (See eBay Sells 60% of Skype for $1.9B and Skype Sale Imminent?)

That's amazing, even for a company that offers most of its connections for free. But I wonder: Did every single Skype user only spend $1.36 with Skype last year?

Think of the potential if eBay and its new Skype partners could get each registered user to spend a full $4? The company's revenues would skyrocket!

I know, not every registered user is an actual person. Many of them are infrequent users who spend no money (like me), and others are dead and are still being counted as customers. That's Internet math for ya.

Skype is one of the most powerful communications tools ever invented. When I had my first video conference with my family in Texas from a hotel room in London three years ago, it dawned on me that such calls are much more valuable than the nothing I was paying.

With so many users getting so much value from Skype, it seems exceeding the $1 billion in 2011 is not only possible, it's probably on the low end of what they'll accomplish.

Now that a more focused team of investors has put their lot in with eBay, what do you think will happen next?

— Phil Harvey, Editor-in-Chief, Light Reading

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