Although Skype, which provides Voice over Internet Protocol (VoIP) telephony services and PC-to-PC calling, turns two years old on August 29, it remains unclear what kind of business this relative newcomer will turn out to be. Skype could remain a mere fad for techies, become a next-generation communications platform or evolve into the next eBay or Google, say Wharton experts.

What's certain, however, is that Skype, which has offices in Estonia, London, San Francisco, Korea and Japan, is worth watching. The company touches on a handful of key trends--peer-to-peer technology (using the computing power of a distributed network of PCs), the commoditization of telephone service and the viral nature of Internet marketing.

For now, Skype is generating revenue by selling value-added services such as voice mail and the ability to call someone on a regular phone for a few cents per minute. In the future, Skype could sell subscriptions, charge small fees or license its software. According to Zennstrom, who also spoke at the AlwaysOn conference, if Skype can get just a sliver of the people who download its software to pay, it will generate profits because "we have no cost per additional user." Skype doesn't disclose its financials.

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