Hi Sharon
I've been teaching via Skype, Google Hangout and FaceTime for three years now, (I use whatever is most suitable for each student). As a teacher you really have to be super organised and design the lessons so that they work over Skype, (preparation of backing tracks, material to be printed for the lesson etc - you can't just grab a duet book and work through that!) Initially I went over to Skype so that I could keep teaching students from Northern Ireland when I moved to Cambridge, I hated leaving students I'd spent years working with, and when I needed to move, the technology enabled me to keep these students and add more from all over the world.
One great example was a student I teach who lives in Greece, (I'm in Cambridge). This student only physically 'met' me the morning of his grade 5 exam. I had been teaching him for over a year and he flew to Cambridge to take the exam as it was easier than getting to Athens and finding an accompanist. He scored a very high distinction in his Grade 5 ABRSM exam, he's only 12 - (143/150) and all my Skype exam students actually outperform my 'in person' students when it comes to exam marks - this was not something I expected.
I wrote a blog post about this and you can read in more detail about it here,
http://cambridgesaxophone.com/wp/skype-students-100-distinction/ and view what my students say about Skype lessons here,
http://cambridgesaxophone.com/wp/testimonials/.
It really is quite incredible that my student who lives on a Greek Island can receive tuition that only a few years ago would have been the preserve of large cities.
It is a teaching style that is still very much in its infancy, but it will be mainstream in a few years time.