Updated: Ribbit croaks, just three years after $105m BT deal

Frog used under CC license by GoingSlo on FlickrIn 2008, when British Telecom paid $105 million to buy the developer service Ribbit — which liked to call itself “Silicon Valley’s first phone company” — it was a confusing move.

The business essentially provided a platform for web developers to add phone services into their sites: a suite of APIs that could potentially help them incorporate the likes of Skype, Google Voice (s:GOOG) and so on simply and easily. This made some sense for BT, which is Britain’s largest telecom operator and was desperate to claw back some ground in internet voice. But even so, there was plenty of skepticism.

On this site, Om called it pretty bluntly. “BT has always been long on promise, but short on execution of its grand vision,” he wrote about the deal. Meanwhile Tom Foremski at ZDNet called it “blackmail innovation”.

Today, those concerns seem to have come full circle, with the news that Ribbit is effectively shutting down most of its public-facing operations in just a couple of months.

In an email sent out to customers, Ribbit gave 60 days notice of a service shutdown and said it would be focusing on providing internal technology for BT in the future:

“Thank you for your participation in the Ribbit developer program over the past few years. We recently changed our business objectives to focus our efforts on voice technology for our parent company, BT Group, and have decided to discontinue support and external access to our voice platform, SDKs and APIs.”

As Venturebeat’s report on the news suggests, users are now being directed to switch to Twilio, a rival service that provides similar tools and has done well over the last few years. It’s a great win for Twilio, since even though it’s not obvious exactly how many Ribbit users there were, or how many will switch, it is essentially free customer acquisition for them.

So what happened?

The reality is that this move has been a long time coming.

The acquisition deal was in part architected by BT’s chief scientist at the time, JP Rangaswami, who brought in some of his own team to help Ribbit really try and gain traction. But last year Rangaswami jumped ship to Salesforce and taking some staff — such as former VP of Web Services Kevin Marks — with him.

Without a champion, it seems that pressure was coming to bear on the business. As a result, rumors of some big strategic shifts were afoot last year, with Opus Research reporting that the business was being brought in-house. That is, that Ribbit was being changed from an outward-facing, developer resource into a set of tools used internally at BT to build products that it could sell to customers. When there was an exodus of staff at many levels earlier this year, including co-founders Crick Waters and Ramani Narayan, it became fairly clear this is what was going on.

Bringing Ribbit inside BT means that while it isn’t exactly dead as an idea — it will live on inside the larger company, after all — it is pretty much dead as a product. True, the company still operates in two other sub-categories: Ribbit Mobile, a suite of consumer products for cellphone users that has been in beta for some time, and a service that hooks into Salesforce, and the notice to customers is swift to point out that they aren’t affected by this shutdown (“this notice only refers to Ribbit Developers and does NOT impact Ribbit Mobile or Ribbit for Salesforce users”, it says).

Update: A BT spokeswoman tells us there are no plans to shutter those services.

“Ribbit technology is pivotal to BT’s voice technology strategy, and we have been integrating it into the business since we purchased the company … we are integrating Ribbit into a number of services to provide our customer facing teams in BT Retail, BTGS and BT Wholesale the ability to sell and market services that utilise underlying Ribbit technology.

We can confirm that Ribbit is closing its developer programme to concentrate on future voice technology for BT Group. However, users of existing Ribbit services such as Ribbit for Mobile and Ribbit for Salesforce are not affected in any way and we are in fact hiring in Mountain View.

But the truth is that despite what they say, things aren’t looking too healthy there, either. The last post on the Ribbit Mobile forum is a plaintive cry from late last year of a user who worries that there haven’t been any updates.

And ultimately, whatever happens, the fact is that the business can’t ever really live up to its full potential — or the acquisition price — if it’s only ever operating inside its parent company. But perhaps we shouldn’t be so hard on them: after all, the Ribbit deal was made just as we all teetered on the brink of the full-blown financial crisis: the world is a very different place now than it was then.

Photography used under Creative Commons license courtesy of Flickr user GoingSlo