Skype's Newest Duets

By Kathleen Kingsbury

Who's that girl crooning from your PC? Why, Madonna, of course. She is just one of the musical heavyweights you will find on Internet phone-service provider Skype these days. Earlier this month, Skype, owned by eBay since October, partnered with Warner Music in a deal that lets Skype dip into the label's expansive catalog to offer ringtones to its 74 million users, adding to its premium services--which generate most of Skype's revenues. The Material Girl, Green Day and Mike Jones are headlining Skype and Warner's landmark debut into the $1.2 billion ringtone industry. In fact, at $1.50 a pop, ringtones are like "found money" for both parties, says music-industry analyst Charles Golvin of Forrester Research. "Neither has to do a whole lot of work--just license, sit back and count the money rolling in."