Skype (Phoning For Free) Downloads Surpass A Quarter Billion

Skype, the free phone company, recently surpassed a quarter of a billion free downloads of their calling software. As recently as October of 2005,  170,000 people per day were accessing the download.

Skype is legal and it is free. Skype uses VoIP technology to place calls over the Internet. To use Skype for free you need the software and a computer, and the person you are calling needs the software and a computer, too. The easiest way to converse is to use a headset connected to the computers at each end of the call.

Skype was recently bought by eBay for $2.6 billion. So why would eBay want to pay that much money for a company that is giving away its services for free? Aahh…as with so many things on the Internet, the true value chain is down the road a bit.

If you want to call a friend anywhere in the world who doesn’t have Skype, and you want to reach them on that person’s regular land or mobile phone, you can do it for a little extra (SkypeOut). If you want to receive a Skype call from someone who doesn’t yet have Skype, and they are using a regular land or mobile phone, you can get your own Skype telephone number and they can call you for a little bit extra (SkypeIn). If you want to go wireless or have your own Skype phone, you can do it for a little bit extra. And, like so many things on the Internet, those “little bit extras” magnified by the one billion people who are now on the Internet, can add up to some enormous potential. A billion-people target audience does amazing things to economies of scale.