2008 Year in Review: Me-too VoIP mob gets right-sized and diversified


It's almost fair to use the term "a gazillion" when estimating the number of VoIP startups that launched around 2004-2005 with almost the exact same characteristics/features, including: 

  1. A free download-able client that included IM, VoIP, presence, and (most of the time) video. Then later a web-based client.
  2. Free client-to-client calls
  3. Free phone number or numbers
  4. Free features like visual voice mail, multi-line ring and call forwarding.
  5. Really cheap long distance and international minutes 

Net-net: A large number of companies trying to make a business on selling voice minutes for the cheapest rate, where the best rates literally vary by pennies and fractions of pennies, and everyone knows what their competitors are charging in near-real-time. 

Leveraging VoIP to beat mobile rates soon came along, and the latest wave of the me-too mob has added "social networking" to the mix of buzzwords. But, at the core, it's still the same feature set and the same cheaper minutes play. 

Smarter companies have diversified out of the me-too core in different ways. Ifbyphone has built a set of unique business toolkit of applications so you can't even call them a "me too." Jajah is now in the business of becoming a back-office/back-end provider for other VoIP services, including Gizmo, MOBIVOX and Yahoo. Truphone bought themselves a SIM roaming operator and hasn't been afraid to fight established cellular operators in court to get what they own. 

Jangl was the most notable under-performing company to run out of venture money and die, as it eventually proved to be unable to generate enough cash flow to sustain operations. It also was helped along by Jajah poaching its technical talent.  

We expect more of the me-too VoIP herd to thin out in 2009. There's just not room for a gazillion companies, no matter how big the market is. 

FierceVoIP's Fierce 15 - 2008
EQO - Another mobile VoIP player bites the dust? - FierceVoIP
Jangl and TalkPlus On the Block - FierceVoIP
Fring cuts 20%, claims biz surging, blogger bashes
The Fallen - Crashed and struggling VoIP companies