Using the web to deliver software to customers "on demand," companies such as (NYSE:CRM) have been growing at a torrid rate. However, another on-demand player often gets overlooked: WebEx Communications (NASDAQ:WEBX). But that's starting to change, as seen with last week's 21% surge in the stock price. A large user base is finally helping the company to gain considerable traction.

In the fiscal fourth quarter, revenues increased 22% to $101.9 million -- the first time the company crossed the $100 million mark in sales.

Net income increased from $13.6 million, or $0.28 per share, to $16.7 million, or $0.33 per share. These numbers include a charge for stock-option compensation, as well as expenses for WebEx's acquisition of

Founded in 1995, WebEx has a full-featured offering for web collaboration, letting users hold virtual meetings and sharing software applications, documents, and even video in real time. The firm sells its software service primarily on a subscription basis; there are 2.2 million registered users, and WebEx's retention rate is a fairly high 98.4%.

This large user base is a valuable asset, and management plans to leverage it by launching WebEx Connect. This allows software companies to integrate with the WebEx platform and sell into the large user base. The company's partners include Business Objects (NASDAQ:BOBJ) and BMC (NYSE:BMC). WebEx Connect should enhance the overall value to its customers, and also lead to improved revenues on a per-customer basis.

WebEx has competition from players like Citrix Systems (NASDAQ:CTXS) and Adobe (NASDAQ:ADBE). However, the company has been able to continually enhance its product offering with new features such as heavy-duty security protection.

As a sign of its competitiveness, WebEx's margins increased by 1% during the fourth quarter to 84.4% (compared to the prior quarter). This shows that management is able to scale its infrastructure as well as maintain strong pricing.

Going forward, management has increased its full-year guidance for 2007. Revenues are expected to range from $450 million to $465 million, which is up from its prior forecast of $450 million to $465 million. Earnings per share guidance has increased from $1.19-$1.29 to $1.24-$1.34.

However, with the surge in the stock price, it makes sense to me to hold off from jumping in. But in light of WebEx's strong core business -- as well as the potential for WebEx Connect -- this is definitely a company to keep an eye on.

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Fool contributor Tom Taulli does not own shares of any company mentioned in this article.