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MagicJack’s Magical Growth

MagicJack activates 10,000 new users each and every day. After 2 million bought the ultra-cheap phone service in 2008, more than 3 million more will sign up by the end of 2009. Sales for 2009 will top the $100 million mark. Why is everybody buying MagicJack’s internet-based phone service? Because they are saving lots of money. Dan Borislow, the founder of MagicJack, claims consumers will save $1 billion in 2009 with his discount phone service; around $1,000 per year for each customer. This is based on the lack of fees for monthly service, long-distance, and all the other features MagicJack offers for one low yearly cost.

MagicJack’s advertising is all about savings for the consumer. The company doesn’t claim to be better than competitors, only that it doesn’t charge money for the same services you would pay for elsewhere. Borislow previously founded Talk.com in 1990, a discount long-distance service for AOL customers. Millions of Americans bought his plan for a single bold reason, to save lots of money on their long-distance phone calls.

MagicJack has control over their whole business operation. They have built their own CLEC network and acquired a chip company named TigerJet in 2008. Add to this a software company and you can see that MagicJack owns their entire process at this point. The MagicJack is certified in all the US as well as 50 countries around the world.

International sales for the MagicJack have been outstanding. Fully 20% of their sales have come from countries outside the US. Many expats and foreigners who want to spend a lot of time talking to people in the US and Canada use the MagicJack in their overseas location. It is free to talk from MagicJack to MagicJack regardless of locations. If the person you are calling overseas does not have a MagicJack, the rates are quite cheap, but they are only free when both parties has the device plugged into their computer.

The numbers are staggering: 10,000 signups per day, $100 million in sales, $1 billion in consumer savings. MagicJack’s growth has been truly magical.  

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