Skype Me, Sam Walton

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11

There's a new tech wave washing up at Wal-Mart (NYSE: WMT). The world's largest retailer hooked up with eBay (Nasdaq: EBAY) this morning to introduce Skype-friendly headsets, webcams, and handsets at 1,800 of its stores. Wal-Mart will also begin selling the country's first prepaid Skype phone cards.

This isn't necessarily a major catch for Wal-Mart. RadioShack (NYSE: RSH) was the first retailer to hop on the bandwagon, offering $4.99 Skype Starter Kits during the 2005 holiday season. RadioShack isn't any more relevant today, despite betting on the right voice chat protocol.

Skype has nearly 200 million registered users worldwide. The service allows users to communicate via text, voice, and video with other PC-tethered Skype users for free. They can also pay as little as $0.021 per minute for voice calls placed to conventional telephones and mobile devices. That kind of value proposition usually sells briskly at a discounter like Wal-Mart. However, it also demands a generous level of Web sophistication and connectivity that isn't usually associated with Wal-Mart shoppers. Remember, Wal-Mart has struggled in the past to move Internet-based services like online access and DVD rentals.

The young and thrifty consumers turning to Skype are more likely to congregate at cheap-chic haven Target (NYSE: TGT) than at the retailer that couldn't even get social networking right during last year's back-to-school shopping season. Color me surprised if those prepaid Skype cards go flying off the Wal-Mart shelves.

It's more important to note that this deal broadens Skype's brand awareness. It might not be an easy sell, but a spot on Wal-Mart's shelves will help the Skype brand become more of a household word. It's another step forward toward ubiquity, even if the cash registers aren't initially kind.

Wal-Mart has been singled out as an Inside Value stock pick. eBay is a Stock Advisor recommendation. You can find out why with free 30-day trial offers to either newsletter service.

Longtime Fool contributor Rick Munarriz has probably spent more at Wal-Mart's online store than at its offline empire in recent years. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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