You've got to love j2 Global Communications (Nasdaq: JCOM). Any company that can modernize what many had considered a dying technology -- electronic facsimile, or fax -- make it profitable, and grow it into a huge business just tickles me. But with an amazing run-up in the stock over the past five years, investors may wonder how the stock can keep going higher.
News from the company yesterday shows just why it keeps succeeding. j2 announced that it is now possible to port most existing telephone numbers to its eFax service. In essence, j2 Global now makes it easier to switch to Web-based faxing, ditching that HP (NYSE: HPQ) or Canon (NYSE: CAJ) fax machine altogether without changing a long-held fax number. Bringing number portability to those who already have a line dedicated to a fax machine is yet another way for j2 Global to grow its subscriber base.
Customers can sign up with j2 Global and receive faxes for free, or opt for one of two pay packages that start at $16.95 a month. With the telephone bill for a dedicated fax line often exceeding the cost of j2's basic service, it's almost a no-brainer to switch to the company's solution, even if you keep the fax machine. Add to that a host of value-added features, including Web-based fax storage and access to faxes from anywhere, and you have a very compelling offering.
The announcement isn't quite the watershed event that cellular number portability was to millions of consumers. When that happened back in 2003, millions of cellular customers were chomping at the bit to ditch their service from AT&T (NYSE: T), Sprint Nextel (NYSE: S), or Verizon Wireless, a joint venture between Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD). I don't expect j2 Global to see customers flooding to its eFax service, but it will help make the offer more compelling to millions who still rely on fax communications.
The fact that j2 Global could raise prices across its customer base for its fax services speaks volumes about the service's value; the new porting capability just builds on this. Someday, our kids may not even know what a fax machine looks like, but I'd bet they'll still be using a service like j2 Global's to scan, send, and receive documents.
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