Jangl

Wait-and-see VoIP M&A deals

Doug Mohney — Mon, 17 Nov 2008 09:22:26 -0500

Questionable deals

BT/Ribbit

BT paid $105 million cash for a two-year old self-described "Silicon Valley's First Phone Company" - a start-up with no revenues or customers to speak of, but a lot of hype. Sure, it gives BT a larger footprint in the Valley, but it remains to be seen if Ribbit can generate cash through paying Voice 2.0 apps in short order.

As a relative reference point, BT bought Counterpane Security in 2006 at a guess-timated $40 million and Counterpane had 1) real, paying corporate customers, 2) revenues in the tens of millions per year, and 3) big-name security god/cult-figure Bruce Schneier.

GENBAND grabbing NextPoint

Yes, it was the best buy of 2008. But nobody's talked about the sticker price verses what actually was paid. Will GENBAND get its money's worth?

Dumpster diving in VoIP

Live Universe picking over Jangl's bones

We're not sure what was left after Jangl's founders and five engineers split to Jajah, but we're sure Live Universe didn't pay the $20 million offering/asking price that WhitePages.com was reportedly offering before WP started getting cute and shuffling the terms of the deal.

Virgo Publications grabbing VON assets

TICC's "handling" of the VON disintegration pretty much burned away any residual goodwill within the VON community of attendees and vendors. One could argue that there's no place but "up" for trying to rebuild upon top of VON, but we're not really sure of the wisdom of trying to publish another print publication in a market that failed to support the original one. Not to mention a fall 2009 trade show that won't really be a VON if it's down in Miami in September. Or lacking a colorful pundit dressed in purple. Or.. you get the picture.

TalkPlus

Doug Mohney — Thu, 13 Nov 2008 10:00:47 -0500

Founded: 2004

Status: Quietly died May 2008

What did it do: Multiple identities for your mobile phone

Website: www.talkplus.com

TalkPlus led with cheap minutes, but it couldn't quite get average consumers to buy into the real value of "mirror numbers" - being able to make a call through your cell phone, but with the caller ID showing up as either your home phone or office phone or any other phone. For the guy with five brides in five different cities, this was probably a great tool, but there weren't enough lawyers and doctors latching onto it to make a big difference.

Otherwise, you had the same me-too VoIP tricks of lower/cheaper minutes, visual voice mail, multi-line ring, call screening, call transfer and the like.

TalkPlus raised an initial round of $5.5 million and, like Jangl, was strangled due to lack of second round funding. Unlike Jangl, there was no public hug and cry, or embarrassing moments like the founders walking out to the next-best competitor. Don't cry for founder Jeff Black; we're betting he's already deep into his next start-up; his resume includes hotels.com, resorts.com, and iAtlas. [Full disclosure notice: The author knew Jeff when he was a punk working at DEC]

The Fallen - Crashed and struggling VoIP companies

Doug Mohney — Thu, 13 Nov 2008 09:20:01 -0500

While I compiled the 2008 VoIP Fierce 15, I looked back at previous Fierce 15 lists. SunRocket was a member of the 2006 VoIP Fierce 15, and this got me thinking about the many companies that have crashed and burned over the past few years -- plus those that seem to chronically struggle.

Numerous companies rushed into the VoIP world with expectations of changing the world. Most showed great potential at first, winning vital acclaim in the media, throngs of admirers and predictions of greatness.

And yet, at some point in time, fortunes change. Acclaim turns to scorn, devotees turn to embittered critics and dreams become crushed by the real-world.

For some, it was a failure of execution. Others held onto their vision for too long, letting it grow stale and stagnate, becoming a me-too player, rather than an innovator.

Still others overreached, tried to be too much too soon, too fast, and burned out. Plus you have a couple with notably shady characters in their past and shaky business models that never made a dime.

Did we leave anyone out?

- Doug

Jajah, Top VoIP Company 2008: FierceVoIP, Fierce 15

Mon, 03 Nov 2008 17:22:05 -0500

Jajah

Where it's based: Mountain View, CA
When it was founded: 2006
Website: www.jajah.com

Why it's Fierce: Since its' last appearance on the VoIP Fierce 15, Jajah has moved out of the crowded me-to "I've got a free VoIP client with IM/I'm going to make money throw low-cost calls" quagmire with some Fierce business strategy. The company reinvented itself by becoming a backend/back-off VoIP provider for other services, including Gizmo5,MailVision, MOBIVOX, and Yahoo. It put a stake through the heart of Jangl by acquiring Jangl's senior management (OK, Jajah and Jangl had been working together for a while, so it might not be too surprising, but still--). It added a hosted SMB IP PBX offering, another cut above the me-too crowd.

Don't be impressed by Intel's venture investment; Intel throws money at anything that might remotely use its silicon. Be impressed by a ground-floor working relationship to leverage Intel's Remote Wake technology for making voice calls without having your PC turned on all the time. Getting your foot in the door to impact the next generations of PCs is Fierce.

Jaxtr lays off employees

Doug Mohney — Sun, 19 Oct 2008 22:41:42 -0400

VoIP service/social network Jaxtr laid off 13 employees Friday, belt-tightening it claims will let it stay in business for at least another 18 months.

After the personnel cuts, Jaxtr has 30 full time employees. Jaxtr was founded in 2005 and launched in 2007 with a widget to enable users to receive calls from their friends through a VoIP connection while keeping their personal phone numbers private. It later added low-cost long distance and international calling to the mix.

Only a few weeks ago, Jaxtr added "premium memberships" - subscriptions -- to get a more consistent cash flow model than its previous model of a la carte purchases of phone call credits. There's also some ad revenue coming in.

Executive management at Jaxtr says it hasn't spent any of the $10 million VC money it raised in June and the company expects the cash, along with revenue streams and growth, to allow it to keep going for at least 18 months.

Jaxtr's real problem may be lacking enough differentiation from TalkPlus, Jangl, Raketu and other "me too" VoIP plays that leaned heavily on cheap phone calls and free clients, without implementing many unique features.

For more:
- TechCrunch dials in Jaxtr layoff. Post.

EQO – Latest of the Voice/Phone 2.0 facing imminent disaster

Doug Mohney — Sun, 12 Oct 2008 20:10:46 -0400

Canadian-based EQO communications has cut back its staff from 35 to 12 employees. Is it the latest unfortunate canary in the coal mine?

EQO was/is a VoIP/social networking play offering a free application that provides free IM, cheap calling and cheap texting to your mobile phone. The problem is EQO was like about a dozen other companies on the market with the same business plan triangle of free client/cheap calls/on mobile phones, including Jangl, Jajah and TalkPlus.

EQO may have lasted longer than Jangl and TalkPlus to this point, because it managed to raise $13 million in venture capital to Jangl's $9 million and TalkPlus's $5.5 million. Jajah, on the other hand, figured out it is better to play with the big boys by providing outsourced VoIP services to the likes of Yahoo and others.

For many start-ups - VoIP and others - tightening credit markets translate to swim (make money) or die. Regrettably, many VoIP start-ups lost sight of the prime lesson out of the dot.com/dot.bomb era: Cash flow positive is not a luxury. EQO won't be the last company yielding to the ax over the next quarter.

For more:
- Techvibes reports on EQO staff cuts
- GigaOm speculates on what might happen to EQO and other VoIP startups

Howe: Congratulate Failure

Wed, 28 May 2008 16:01:22 -0400

By Thomas Howe

The recent demise of Jangl is an excellent sign for the overall health of the Telco 2.0 marketplace, and although difficult for their investors and employees, portends great things for this market. My sincere wish is that Telco 2.0 failures become more commonplace and numerous, and I firmly believe it will be so. As stakeholders in this market, we need to expect and encourage such failures. Congratulations to those involved, and I mean that sincerely and with no animosity whatsoever.

Not too long ago, new telecom services and applications were costly to develop and deploy, with only a chance of success in the end. Even for those that succeeded, competitors typically replicate the service in short order, gutting profits. The logical conclusion of many managers is to be cautious with new service deployments, and to concentrate on maximizing existing services, stifling innovation. They are afraid to fail, because failure costs money. However, something's changed.

What's changed is that costs of service deployments are falling at an increasing rate. The Internet provides a near frictionless marketplace for both service delivery and sales, and the challenge is no longer the design and development. The trick is now fundamental marketing: what do people want? How do I price this? What is the fundamental problem I can solve? Surely this is no small task, as these questions are notoriously difficult to answer and are as often discovered through dumb luck as solved through excellent analysis. There's no way the existing telecom infrastructure could support the development of a million applications, with the hope that ten thousand will be successful. However, a Telco 2.0 infrastructure can and will.

Telco 2.0 applications are built using web technologies to overlay functionality on the existing PSTN infrastructure. Since the PSTN infrastructure exists, there's no reason for the Telco 2.0 engineer to build the capacity for switching calls around the network. Since Telco 2.0 applications are delivered through the browser, there's no large workforce to manage and train. Since there's no natural geographic barriers, the entire world becomes your serviceable market. Since web technologies are naturally scalable, and are paid on a transaction transaction basis, large capital investments are unnecessary. As a result, it's radically simpler and cheaper to write and deploy them as compared to traditional services.

The result is that we'll see many more Telco 2.0 applications than we've ever seen from any other telecom market. Ever. Nearly all of them will fail, as most of the people developing them will not have the marketing skills to have any real chance of success. They tell authors that about one in a thousand books are actually published, and the number of authors that have published more than one book is smaller still. As you enter your local Barnes and Noble, start counting the books, and realize each represents a thousand others you'll never read. However, without mechanisms that allow people to write books simply and cheaply, how many of the books that fill the shelves would have been written in the first place? I say not many.

Congratulations to all those authors of software and prose who remain anonymous. Congratulations to my brothers and sisters at Jangl. Even though success was not personal for them, in very real and important ways, they guaranteed the success of their markets.

Thomas Howe is a long-time telecom consultant, writer, and speaker who is the CEO of the Thomas Howe Company, providing expertise in improving the business process with real-time communications. His website is at http://www.thomashowe.com

Live Universe Snaps Up Jangl Leftovers

Doug Mohney — Sun, 18 May 2008 00:19:42 -0400

Live Universe has agreed to acquire Jangl's assets and remaining staff. Last week, Jangl's founders and five engineers split to Jajah after the company failed to find a buyer and its board was unwilling to raise more capital.

Live Universe is an online entertainment network lead by the founder of MySpace and the company operates websites across "core verticals" of video, social networking, and music. With a network reach of 56 million unique visitors in June 2007 (Comscore) and sites high in the 16-36 demographic and Jangl's emphasis on adding voice to social networking, it would appear that the two companies are a good fit. There's also some interest in what might happen to Jangl's existing deals with social networking sites Facebook, Bebo, Match.com, Frendster, and others now that Live is taking over.

Jangle's tale of woe started last fall when its board said it wasn't going to raise more venture money and management needed to find a buyer. A deal to be acquired by WhitePages.com fell through and founder Michael Cerda announced his departure through a personal blog posting on May 7.

For more:
- TechCrunch's blog on Live Universe Buying Jangl leftovers

Related articles:
Jangl and TalkPlus On the Block
Michael Cerda's blog on Jangl and Jajah

Nimbuzz Retreads Familiar Ground

Doug Mohney — Tue, 13 May 2008 16:25:39 -0400

Nimbuzz has announced an application to provide free calls, chat and more, pumping an all-in-one solution for free mobile VoIP calling, conferencing calling, instant messaging, chat and group chat, and photo and file sharing across multiple IM communities, including Skype, MSN, Google Talk, Yahoo, and AIM, plus 23 social networks, including Facebook and Myspace. Is an offer to include a set of Ginzu knives far behind?

It's hard to get excited because of the glut of companies offering bits and pieces to the puzzle, ranging from Skype with a mobile client, free client-to-client calling and IM solution to Jajah/Jangl's bits splicing in VoIP to social networking. Nimbuzz's Swiss Army knife approach with a S****-out approach to pick up a couple of pennies per minute per call sounds tired. Skype isn't standing still either, moving to testing a mobile VoIP client in Europe and other improvements no doubt in the works.

Despite being officially announced today, Nimbuzz says it already has more than 500,000 registered users (collected through their beta started in January 2007) and is generating more than a million logins per week. The company resides in Rotterdam and boasts of venture and strategic funding by Mangrove Capital Partners, the VC backers of Skype.

For more:
- Nimbuzz TechCrunch/Washington Post write-up.

Related articles:
A fring fling on iPhone
Jangl and TalkPlus On the Block
Skype's mobilized phone play

Jangl and TalkPlus On the Block

Doug Mohney — Sun, 11 May 2008 19:33:54 -0400

VoIP companies Jangl and TalkPlus are for sale, reports Om Malik. The VC community isn't interested in further funding the ventures, so it's time to close shop.

Jangl first offered anonymized online calling and then developed click-to-call VoIP widgets for social networking sites. The company raised around $9 million in venture funding, but the only way Jangl made money was through online dating sites; people will apparently pay to make anonymous phone calls to avoid psychos and stalkers. Jangl's senior management got snapped up by Jajah last week, so game over.

TalkPlus had raised $5.5 million in 2006. The company had provided a mixture of mobile UC functionality and low-cost long-distance calling, so you could call your mistress in Taipei using one virtual identity, the wife with another one, and use a third number for work purposes; a voice drop feature enabled the ability to make an MP3 voice through a phone number and then email it. There was also the ability to generate throwaway numbers a la AOL Phoneline.

Both companies have developed interesting technology, but the question becomes who might acquire it and how much someone might be willing to pay for it.

For more:
- GigaOm reports on Jangl and TalkPlus for sale.
- Michael Cerda's blog on Jangl and Jajah

Related articles:
Jangl rolls out ad-based VoIP widget
AOL Opens Up, Yahoo Outsources PSTN interfaces