[qi:004] Updated: A few years ago we saw a gaggle of VoIP start-ups pop-up, each claiming to have their unique twist on cheap phone calls. Some offered anonymous calling services as their signature feature. Others labeled themselves as social voice apps. Some of them tried both and other features. Most jumped on the social networking bandwagon. And many of them – Jangl, TalkPlus and EQO for example — went bust, because they learned the harsh lesson — selling cheap minutes or offering free calls isn’t really a business. One such company – Menlo Park, Calif.-based Jaxtr – apparently hasn’t learnt that lesson. Read More about Jaxtr Launches Free Calling Service. Why?
Regardless of however you spin it, if you are firing 20 percent of your work force and have no real business model to speak of, you are in trouble. That certainly is true of Fring, an Israeli Mobile VoIP startup, which has cut 10 of its 50 employees. CEO Avi Shechter told TechCrunch that his company is doing well. In addition to $13 million it raised in the past, Avi says the company has raised an undisclosed amount of money in its Series C financing.
By doing well, I guess he means Fring’s deal with Mobilkom Austria and an increase in the number of monthly downloads from 100,000 a year ago to 400,000. Mobile advertising is one way it hopes to make money, but it seems like a long shot. Like many of its peers, Fring is going to have a tough time in the future. Jangl and TalkPlus have already shut down, while EQO recently fired 65 percent of its workforce. Jaxtr, another VoIP startup, recently had a management shakeup and has its own set of issues. Other Fring competitors would include iSkoot and Nimbuzz.
Related Post: 7 Ways To VoIP From Your Mobile Phone
Jangl, a Pleasanton, Calif-based startup that launched with much fanfare and lot of promise, ran out of time, and is headed towards an ignominious end. Venturebeat had first reported that Jangl was looking to sell itself earlier this week.
Jangl is not the only VoIP company to nosedive. We have heard from reliable sources that TalkPlus, San Mateo, Calif., company, is going nowhere fast. Michael Toepel, who was the CEO, recently left after the company failed to get new investment to keep it going.
Jeff Black, the founder, is overseeing the operations but there is little hope for this company, which wants to sell its intellectual property. The company had raised about $5.5 million from Menlo Ventures back in 2006. I left Jeff a voice mail but so far no word from him. John Todd, CTO of the company, is still with TalkPlus.
The web-to-mobile calling efforts are starting to get interesting. Last week Jaxtr talked about how it planned to make money by selling ads, and today Jangl launches its own ad efforts tied to a partnership with Pudding Media. The plan is to target pre-roll ads on Jangl’s existing voice calls and SMS messages by using location and demographic information provided in the profiles on various social media sites.
Jangl has already made money by selling the ability to receive calls without giving out a phone number on dating web sites, but the ad efforts are targeting bigger money. Jangl’s CEO Michael Cerda estimates the CPMs are around $30 to $60 for SMS messages ads, and around $10 for voice. Now that revenue is entering the equation, we should soon have less subjective ways to judge who is successful in this crowded market. Sales are a better metric than user numbers when it comes to figuring out which services will succeed.
VoIP startup Jaxtr said today that it has attracted 5 million registered members, up from 500,000 users 140 day ago, making the company “the fastest-growing Internet communications service in history — ahead of Skype, Hotmail and ICQ,” according to its press release.
But where is the money?
You might think that scaling to meet the needs of these millions of users represents Jaxtr’s biggest challenge. Indeed, Jaxtr expresses concern in its announcement over its ability to meet user demand. To that end, it recently hired Taneli Otala, former CTO of MySQL, as VP of engineering.
But Jaxtr has bigger problems than scaling and tuning their systems for millions of users. To make Jaxtr a real business, they need to convert sign-ups into satisfied users, and from there, transform those users into customers who pay.
Even then, there are no guarantees Jaxtr will succeed. If the promise is cheap calling, it’s just the same old VoIP thing.
Back in 2006 a whole crop of VoIP app companies cropped up, each one trying to figure out how they can make a business out of voice, including in-fashion, if pointless forays such as embeddable widgets for social networks. One had to look really hard to find any difference. Their record so far is no different than that of baseball team, Tampa Bay Rays.Things are no different for those who are chasing Facebook elixir.
At least two of the companies are coming to their senses, and teaming up to focus on what they are good at: Jajah on its telephony platform and Jangl on social apps. As part of the deal, Jangl will start using Jajah’s telephony infrastructure, long distance and click-to-call features. Jangl, on the other hand will focus on developing social apps using voice, including some new services for its customers in the online dating business.
“We were going to build a click-to-call service, but since they already have that, and a billing infrastructure, it makes sense to partner with them,” said Michael Cerda, CEO of Jangl. He was candid and admitted that focusing “on stuff that a company is not good at can prove to be distracting and counterproductive.”
* Will dirty talk boost VoIP apps.
* Jangl Coverage
* Jajah Coverage
Disclosure: Jangl is an advertiser on The GigaOM Show.