How is Skype really paid for?

quote:

No one expects to get anything for free these days so many people unfamiliar with Skype's strategy wonder how it can be free to use. There is no hidden fees or scams involved and Skype does make a profit. It does this by offering premium services that allow users to buy credit to make cheap phone calls to landlines and cellphones worldwide. Premium services also include voice-mail and a phone numbers others can use to call your computer from their traditional telephone.

Skype's free service revolves around video and audio calls, instant messaging and file transfers made from one Skype user to another Skype user. These free services are subsidized by Skype's economical premium calling features. Skype offers a complete telephone service including an online number, voicemail, call forwarding, cheap international calls. Premium users can choose from either a pay as you go option or a from a variety of monthly calling plans, such as unlimited calling in the U.S. and Canada. Packages are also available for calls to Mexico, India ans several other countries.

As VOIP calling becomes more and more popular, many people are giving up their traditional home phones and switching to the more economical Internet services such as Skype. This trend predicts that Skype's profits and market share will continue to grow quickly over the next few years. Skype's attractive integration with cell phones, voice mail, etc. make it extremely attraction to modern consumers. As the enormous profit potential becomes clear, one can quickly understand how Skype can afford to offer such a variety of free, quality services to customers. Skype uses the free services to attract users with the assumption that a certain percentage will sign up for premium Skype services. This business model is seen more and more in the online business world, and is certainly not a scam or a hoax.