A new low-cost voice over Internet Protocol service started by serial entrepreneur Michael Robertson promises to provide cheap phone calls without requiring any software to be downloaded.
(Credit:
GizmoCall)
The service, called GizmoCall, launched this week. Unlike Skype, which requires users to download a software client to use the service, GizmoCall is Flash-based, requiring nothing more than a browser. Users simply go to the Web site, sign up for a username and password, and start making calls.
Just like other VoIP services, the allure of GizmoCall is that it provides free and low-cost calling. Free calls can be made to other GizmoCall users and to Gizmo5 users. Gizmo5 is a version of the same service that requires a software client and also provides other features, such as instant messaging.
But what is cool about GizmoCall is that it also allows users to make free calls to toll-free numbers and Session Initiation Protocol addresses. SIP is used to enable telephone calls to be made over the Internet. Using a SIP address, which consists of a username and domain name, enables people to make and receive phone calls all over the world. Services like Net2Max provide SIP addresses and can even help people forward SIP calls to their Skype user accounts.
GizmoCall also allows people to call traditional phones and cell phones for low rates. And for a fee, users can also accept calls. But users have to be signed into the service to accept calls. The service works on all browsers running on Mac, Windows, or Linux operating systems.
I tried the service on Tuesday to see how it compares to other services, such as Skype. For the most part, the call quality was comparable to Skype.
I made a quick free call using a toll-free number, and it was fine. But adding money to my GizmoCall account so I could call regular phones was not so easy. I followed the instructions to add $10 to my account using my credit card. Two hours later, my account was still at zero, even though the service had accepted my credit card.
I've had similar credit issues with other VoIP services. I was told by one VoIP company that there is a lot of fraud associated with these services, so everyone is very careful to verify orders. But as a legitimate user trying to use the service, it was just annoying.
I suppose that the service is useful for someone who doesn't want to download software onto his computer. But I didn't really find the service or any feature compelling enough to ditch Skype. The holy grail of VoIP services is finally creating a service that enables free calls to anyone, including traditional phones and cell phones. Until that happens, most of these services seem the same to me.
Start-up IP telephony providers Jajah and Jangl are teaming up to take on the competition, the companies said Thursday.
The companies are part of a new generation of voice-over IP providers that have crept up recently hoping to replicate the success story of Skype, which was bought by eBay two years ago for $2.6 billion. The market is already crowded with dozens of these small players. Typically at this stage of the game, start-ups are too busy duking it out against each to forge partnerships, but executives at Jajah and Jangl say it makes sense for them to partner even though some of their products may overlap.
"It is rare to see companies at this stage do something like this," said Michael Cerda, CEO of Jangl. "But it's such a confusing market out there and the press and VCs often lump all VoIP providers together. But our strategies and technologies are really very different. And when we sat down together, we realized they're actually complementary."
Jajah is focused on providing low-cost international calling. Already it has the ability to terminate calls or transfer calls from the Internet to the local telephone network in more than 122 countries around the world. Earlier this year it received funding from the German phone company Deutsche Telekom. And it has ambitions to grow into a major telecommunications platform provider in the future.
Jangl, on the other hand, is focused on providing secure phone calling for social-networking and dating Web sites. The service essentially provides alternative local phone numbers that can mask a person's actual phone number, so that they don't have to give out a personal telephone number to strangers.
But while their focuses may be different, Cerda and Frederik Hermann, director of global marketing for Jajah, say they see benefits in working together for both companies. For example, Jajah is about to launch an in-call advertising platform. The way it works is when a user is being connected to a call, he has the option of listening to a short 10-second advertisement. As a reward for listening to the commercial, the user earns credit, which can be used to defray the cost of making future calls over the Jajah network.
Jangl, which claims to be on some 40 million social-networking profiles on sites such as Match.com, says it brings an important target audience to advertisers because its service is already integrated into the media-rich social-networking world.
"Jajah brings the ads and we bring the customers," Cerda said.
Also as part of the deal, Jangl will be able to terminate calls onto the regular phone network from the Internet in all of Jajah's 122 countries. Today Jangl only offers termination service in 32 countries.
"Over the past two years, we've built a huge back-end system for terminating calls all over the world," Hermann said. "So we're able to allow Jangl to use that resource and we recover a small margin on that."
But Jajah and Jangl's main competitor Jaxtr says the companies are merely running scared. "I see it simply as the weak banding together," said Konstantin Guericke, CEO of Jaxtr.
One thing is for certain, partnerships are tough to manage no matter the size or stage of growth of the companies involved. But who knows? Maybe this partnership will be a prelude to a merger. Executives from Jajah and Jangl haven't ruled out the possibility, but they each say it's not on the table right now.
"Merging the two companies might make sense at some other juncture in the future," Cerda said. "But both companies are still so young. And they have something they want to be when they grow up. And we have something we want to be when we grow up."
SunRocket, a voice over IP provider, told employees on Monday that it's shutting down, according to several reports from former employees.
The company's Web site is still up, but its customer service line has this recording: "We are no longer taking customer service or sales calls. Goodbye." An internal memo from Sonya Jefferson, director of routing and carrier services for SunRocket was posted on the GigaOm blog earlier Monday.
"Unfortunately this email contains very bad news. We have just been informed that any and all last ditch efforts to keep operations running as well as a potential sale of the company have not gone through and that SunRocket will cease operations at COB today. As such, today is my last day and everyone else you may have worked with at SunRocket. Regarding outstanding and future invoices: Sherwood Partners out of Palo Alto will be handling the close down of all invoices, current and outstanding."
SunRocket, which claimed it had 200,000 customers as of April, was one of several companies to offer an inexpensive telephony service that competed against the traditional phone companies. SunRocket's demise is not surprising. Thanks to IP, voice has become just another software application with companies like AOL, Google, Yahoo, and EarthLink incorporating it into other Web services.
Analysts have been predicting that it would be difficult for companies, like SunRocket and the more popular Vonage, to base an entire business around a VoIP service. While VoIP makes it relatively cheap to serve customers, it's still expensive to acquire them. And that is just the problem that Vonage faces.
Vonage, the most well known VoIP company, last reported it had about 2.2 million subscribers. But the company has also been struggling. Earlier this year a jury in Virginia found the company had infringed on three Verizon patents. Vonage is currently appealing the decision, but the legal battle is taking a toll on the company. In court in April, it said that it has been losing about 50,000 customers a month.
The trouble that SunRocket and Vonage is having is a clear indication how hard it is for a start-up to compete head-to-head with the traditional phone companies. Some of the newer VoIP companies, like JaJah, have learned this lesson. And they're designing services that work alongside traditional phone services, instead of simply replacing them.
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