Magic Jack – A Recession Winner

Magic Jack seems to be on a roll and the roll could make the folks at Magic Jack over $100 Million this year. So what makes Magic Jack so attractive? How about local and long distance calls for as little as $20 a year. Who is buying Magic Jack? Will according to a recent article it is the older people who are trying to save a few bucks.

The company is selling about 9,000 to 10,000 MagicJacks a day, according to Borislow, and customers are using about 500 million minutes a month. The company will do more than $100 million in sales this year, Borislow says, and is cash-flow positive.

Who’s buying MagicJacks? Many older people, so far, especially in retiree or seasonal-living states like California and Florida. (The company’s average customer is over age 50.) And about 20% of its customers are overseas — ex-pats or foreigners who want to make cheap calls with America.

But Magic Jack has a few other tricks up their sleeves:

But MagicJack is working on cool, new tech, too: A wireless base station for your home called a “femtocell” that lets you use your GSM cellphone — perhaps even Apple’s iPhone — with MagicJack’s service. The company also promises that number portability — get your current number to work with MagicJack — is coming this year.

There is another interesting point on how Magic Jack makes their money. The folks at Magic Jack get their numbers for free while others have to buy them. When a customer from another phone company calls a Magic Jack client, Magic Jack gets to bill the other company. Nice.

Comments welcome.


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I have been writing for Lockergnome for eight years.

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  • Goose

    I fall into that over 50 catagory. I just cancelled my MCI service. Magicjack works just OK. Can’t wait for Obama and his boys to find a way to tax it……

  • Ryan Farmer

    Magic Jack seem to astroturf quite a bit if you ask me.

    For every negative comment about their “deceptive business practices” on sites like Rip Off Report, there’s suddenly a dozen posts calling the person with the complaints dirty names, insulting them, and writing positive reviews.

    The other “consumers” write these, and never a rebuttal by Magic Jack, which makes me think that Magic Jack is writing them as consumers.

    Most big companies do this astroturfing, Microsoft hired Edelman to do it just like they had done for Walmart.

    Also, there was a guy that worked fo Creative that was paying people who never owned their products to write favorable reviews on Amazon.

    You absolutely CANNOT trust “customer comments” because the customer may actually be an agent of the company that wants to sell the products.

  • Bryan Price

    Why it’s taking so long to get phone number portability is beyond me. I know of a user who’s ready to go all the way, but he’s not about to lose his number that he’s had for years.

  • Ron Schenone

    Heh Goose,
    Send me your new phone # if it has changed.

  • Kerry E

    If number portability is coming this year… 2009 … then time is almost up. I think Magic Jack is great for the price, but I also think that the company keeps making promises with no intention of providing the service. I mean they’ve been saying it was coming for years now. Porting is not a new technology, but I’m sure there are costs associated with it that require MJ to be treated as an actual phone company and then they’ll be in the whole “paying for access” just like all the other communications company’s as well as the taxes levied.