After a really rough 2007, Vonage (VG), the independent voice-over-IP service provider, seems to be having a better 2008. This morning the company reported its first-quarter 2008 financial results, and well, things are not bad. Not spectacular, but not bad, either.

More importantly, the company announced plans to sell Covad DSL services, rebranded as Vonage Broadband and tightly coupled with its VoIP service.

Revenues increased sequentially by 4 percent to $225 million, thanks to an increase in the number of subscribers (30,000, bringing the total up to 2.6 million) and average revenue per user to $27.85, up from $27.42 sequentially. The net loss for the quarter was about $9 million, or 6 cents a share. The only bad news: Average monthly customer churn increased to 3.3 percent in the first quarter of 2008 from 3 percent in the fourth quarter of 2007.

More importantly, the company is looking to diversify its business, and today said it’s going to start selling broadband service. It has formed a partnership with Covad, which is going to provide the DSL pipes for the new Vonage Broadband service, which will be available to both residential and small business customers. The company expects the new service to be available by the end of the year.

This is a smart, strategic move by the company, which has been punched silly by the incumbents. I’m surprised it took them so long. I think this helps Vonage overcome all the problems created by broadband providers and their networks. Now the big question is: Will consumers buy DSL service from a company with a checkered record when it comes to service and customer satisfaction?

Disclosure: Covad is a sponsor of GigaOM.

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.

Back to Jangl! Cerda along with Jangl co-founder Ben Dean and three other Jangl employees is joining Jajah, one company that seems to be defying the odds, mostly because it changed its overall strategy. “Jangl will sell its assets and there are people who are interested in this,” Cerda said. “The company was finding its groove in the marketplace, but our investors thought it wasn’t enough for us to keep going, and decided not to fund us.” Jangl had raised about $9 million in VC funding from Storm Ventures, Labrador Ventures and Cardinal Ventures.

Jangl had started out by creating a bidirectional number that kept the privacy of the caller and call recipient intact. It later changed its tactics and tried to use social networking widgets to grow its customer base, in the hope that it could make up the cost of free calling on advertising. The only place where it found success was amongst the online dating sites, where it allowed people to make anonymous voice calls to each other.

Cerda explains the rise and fall of Jangl on his blog.

And in our opinion it needed another 18-24 months worth of runway to realize its fullest potential; but at the end of the day every venture capitalist has their own coefficient of venture. To that end, we took company forward into an M&A process. Unfortunately with much bigger things happening in the marketplace it turned out to be the worst time in a few years to be selling.

That last line should send a shudder down the spine of Web 2.0/Voice 2.0 entrepreneurs who are looking to sell and get out of Dodge.

AT&T, in conjunction with some 10-15 incumbent telecom carriers — British Telecom, Deutsche Telecom and NTT among them — is plotting to launch a Skype competitor, according to a research report issued this morning by ThinkEquity analyst Anton Wahlman.

This is Wahlman’s theory for now, but his track record is full of theories that have eventually been proven right. For instance, he once issued a report that outlined 16 reasons why Cisco should buy Scientific Atlanta — which the networking giant went on to do, for $6.9 billion. For that reason alone, I put in a call to AT&T to get the lowdown, but all they would offer was the boilerplate phrase, “We can’t comment on this type of speculation.”

Anyway, back to the Skype competitor! Essentially what Wahlman is saying is that incumbents are going to offer a VoIP client that will work on the incumbent broadband/3G wireless pipe, and will use a backend platform that will allow folks to make free voice calls to anyone who’s logged into it.

Much the same way as Skype-to-Skype calls are free, incumbents could use their platform to keep calls from each other’s network free. The plan could help them avoid the termination charges and still make money when the calls go off the network to, say, a rival’s phone service or wireless network. “We believe that they will have to use a common client and common software platform in order to make this work,” Wahlman said.

Isn’t it too little, too late? Realistically speaking, there’s a slim chance of anyone catching up with Skype, which keeps adding subscribers and which, despite being mismanaged by its acquirer, has a momentum all its own. “Better late than never,” was Wahlman’s take.

Here are some key points about this yet-unnamed proposed Skype killer:

* To be launched in 2009.
* The concept will be extended to mobile phones eventually.
* The service would run on the carrier broadband connection, and also on top of the 3G/4G wireless broadband pipe.
* The service will be used as a lure for selling other services such as video.
* The incumbent consortium partners can brand this service any way they want.

Big shifts in the telecom landscape are forcing the carriers to think along these lines, Wahlman said in a chat earlier this morning. First, carriers are reluctantly facing up to the fact that voice has become a losing proposition. Thanks to competition from folks like Skype, voice is becoming essentially free. Second, they are losing fixed-line customers with an alarming rapidity.

As I have noted previously on several occasions, the carriers are in a race against time — these line losses basically make their plans to sell other services such as broadband and video impossible, thereby risking their future plans all together. The cost of winning back the customer who switches to, say, cable, VoIP, or a rival’s wireless service is just too high.

In the past, carriers have merely taken half-measures to address the voice-for-free problem. So this is radical new thinking: If voice is a losing business, why shouldn’t the carriers cannibalize it themselves, then sell other services, including video? As Wahlman noted, “Robust data connection is the most valuable service the carriers sell.”

Amen to that. I just find it hard to believe that the dinosaurs are finally getting jiggy with this new way of thinking.

A single commodity hard disk is fast on its way to being able to store every song ever recorded;* a close examination of how the rapid improvement of storage technology might apply to communication, therefore, is long overdue. Consider email, where the retention of messages enables the threading of conversations by recipient, subject and date. For while recording telephone calls usually means government wiretaps, the merits of a communication archive from an end user’s perspective deserves some consideration.

Few over the age of 25 will like the idea of creating a permanent record of telephone calls and other forms of communication, but the discomfort of mature adults can represent a counter-indicator. Plus, it seems safe to assume that people can distinguish between government (bad) and personal (good) uses of recording technology. Communication archives will require strong privacy tools and a reliable delete function, but an argument against a permanent record is an argument against communication. After all, people avoid email in some contexts, but no one proposes eliminating email archives.

The retention of telephone numbers for calls dialed and answered represents an important feature of cell phones. A record of the content of a call could provide a similarly rich resource. The ability to play back a conversation could improve understanding or resolve disputes the same way as re-reading an email can. Voice conversations might get forwarded or included with a reply. Search technology could be applied directly to the audio or after a speech-to-text conversion. An accumulated body of communication would represent an important source of information and a treasured asset in the same manner as email and traditional letter writing.

Unified communication and messaging efforts seek to converge diverse modes of communication into a single stream, but the ability to link all forms of communication by subject, time and recipient may prove to be more useful. Conversation threading might work something like CRM for personal relationships. Tristan Louis offers a detailed wish list in his blog post describing a Personal Relationship Manager. Importantly, trust and the inflexible nature of the telephone network make AT&T et al. poor candidates for implementing conversation threading. The challenge is far better suited to the Internet-enabled communication tools of the emerging infocom industry.

How recording might alter communication behavior remains to be seen. The fact of a permanent record may improve the prospect for civil behavior or it may not — that certainly hasn’t proven to be the case for email. There exist laws regarding the recording of telephone calls, but the extension of off-line laws to an Internet context can prove hazardous. Efforts to implement conversation threading might give rise to an entirely new category of communication, as different from traditional telephone calls as email differs from writing a letter. And the utility of conversation threading may prove greater than the discomfort associated with recording telephone calls. Regardless, there is ample room for improving the communication status quo.

* 4 terabytes holds 1 million, 4-megabyte song files — the equivalent of 20,000 recorded songs each year since the arrival of record labels in the 1950s.

I’m no fan of the phone companies’ tactics of stifling competition in broadband through the strategic deployment of lobbyists in Washington. Thanks to FCC Chairman Kevin Martin, they have gotten what they needed. Perhaps that’s why I was struck by this Ars Technica headline: “Grab your wallet: Qwest wants release from line-sharing rule.”

The Ars report points to a study by QSI Consulting which concludes that: “Qwest’s bid for local deregulation will unleash $1.14 billion in higher charges annually for customers in four major Western markets if approved by the Federal Communications Commission (FCC).” Wow, that’s sure to get everyone’s attention — especially mine, since I’ve been watching the slow asphyxiation of the 1996 Telecom Act for some time now. (I should note, however, that I also am skeptical of claims made by the study, mostly because QSIConsulting counts XO Communications as a customer and the study was commissioned by XO.)

If Qwest gets its way, it won’t have to provide its lines (and facilities) on a wholesale basis, which essentially means there is no way independent companies can exist unless they build their own facilities. And that, of course, is why XO Communications is up in arms. The arguments to deny Qwest’s request are many and valid. Verizon also wants to back away from giving wholesale access to its competitors. I think this is a crummy move by the phone companies. They got everything they ever could have wanted out of the 1996 Act; any concessions they had to made they’ve since sneakily reneged on. XO is right.

So all the noise, anger and finger-pointing at Comcast’s cheap traffic tricks didn’t impact its broadband business. The company just reported a decent enough first quarter, but what got my attention: It now has 14.1 million high-speed subscribers, compared to 13.6 million at the end of 2007. That translates to about 500,000 new subscribers. Given how broadband sales have slowed down for DSL providers (but not for FTTH services), this is pretty significant. Karl on DSL Reports is taking a glass-half-full approach to the earnings but writes that things are slowing down. Seems like extra speeds are helping push the revenues as well, according to the company:

The strong subscriber and revenue growth in the first quarter of 2008 benefited from the introduction of additional promotional offers and speed tiers, including Comcast’s BLAST and Performance Plus services (8Mbps or higher service) and Comcast’s Economy Internet service (768Kbps service).

Another astonishing number: Comcast added 639,000 Comcast Digital Voice (CDV) customers during the first quarter — penetration reached 12 percent or 5.1 million customers with revenues of about $587 million in the first quarter of 2008. Time Warner Cable also posted a similar kind of growth, adding 280,000 phone customers and 304,000 high-speed customers in the first quarter. In comparison, the phone companies keep losing landline customers. No wonder phone companies are worried.

About two months ago, I wrote about my decision to get rid of my land line and rely strictly on my cell phone — with its unlimited plan — for my voice needs. It was a mistake. My social network (namely in the form of my mother-in-law) couldn’t take it, so my husband and I capitulated and returned to AT&T for a basic land line with no frills for about $20 a month.

I should note that when we lost the land line, neither my husband nor I really noticed. There was one awkward moment when I had to send a fax and realized I couldn’t unless I went down the street to the grocery store, but other than that, I never missed the cord. My mother-in-law, on the other hand, a wonderful woman who still carries around a copy of the Yellow Pages in her car for when she needs to look up a number or an address, was very uncomfortable with the idea.

Since she regularly comes over to watch our daughter, and never charges her cell-phone battery, I saw her logic. And it got me to thinking about babysitters in general, and the possibility that we may one day hire one who didn’t have a cell phone (hey I suppose it could happen). More likely would be a case of bad reception, but if that coincided with any sort of emergency, they’d essentially be left incommunicado. It just seemed safer and easier to keep a cheap, dedicated land line.

To me it’s an important reminder that technology is essentially about linking us to one another (and being able to carry 10,000 songs in a gadget smaller than a cigarette case). To really make it work, your friends and family have to participate as well. That’s obvious on a social networking site, but less so when it comes to hardware and networking. For when I tried to cut the cord, my family wouldn’t let me

photo from wikiHow

Skype has released Skype 3.8 for Windows, and it has better audio, thanks to some improvements in the audio engine. Hopefully it will translate into better call quality and fewer dropouts. The best and most useful feature of this new release: If you change your headset, headphones or microphone, there’s no need to mess around with the sound settings — Skype adjusts everything automatically. Skype folks tell us that they have made a “number of video-related bug fixes” and added their own “UPnP implementation.”

Jajah, one of the many callback service providers, is slowly trying to transform itself into a voice platform, offering others the ability to use its network and back-end billing and fulfillment infrastructure. It struck up a partnership with Jangl back in November 2007. This managed services focus seems to have gotten a big boost, thanks to a deal with Yahoo. Yahoo and Jajah share a common investor: Sequoia Capital.

Jajah co-founder Daniel Mattes tells our friend Alec Saunders that Yahoo will outsource voice services for their 97 million Yahoo IM users to Jajah. Mattes says it now has 10 million users, about 8 million of them joining Jajah over the past 12 months. I guess if you include widget users and people using services on other networks, the 8 million additional Jajah users starts to make sense.

If Yahoo is turning to Jajah for voice on IM, then AOL wants to offer others an ability to integrate AIM Call Out service via its Open Voice APIs into softphones, as well as SIP-enabled hardware and cell phones with Wi-Fi connectivity. AIM Call Out is a pay-as-you-go outbound voice calling service built right into AIM.

Jajah, AOL Open Voice, Ribbit and scores of others are taking a platform approach to VoIP, hoping that adding voice to applications will drive up minute volume and turn them into a viable business.

Ooma, a Palo Alto, Calif-based company that launched with much fanfare last year had run into a wall in recent months. It lost some key executives and failed to live upto its promise. Ooma promised free voice calls for life married to slick hardware was a classic case of too much sizzle, very little steak. Lately there were signs that the company was staring down a dark abyss.

Ooma is not dead, yet. In a bid to try and regain some of its lost momentum, Ooma is cutting the price of its Hub and Scout package by $150 dollars to $250. The company is going to sell a premier service package that is going to cost $12.95 a month or $99 a year. The company is refocusing on the consumer electronics retail channel, said Rich Buchanan, a former Sling Media executive who just joined Ooma as chief marketing officer.

I had a very candid chat with Buchanan, pointing out that it is hard to develop enthusiasm for a company that had overpromised and underdelivered. Instead of developing cheaper products and getting into the retail channel, the company focused on developing strange concept promotions for a device whose value proposition in a nut shell is: cheap calls.

Cheap calling is a tough, low margin and volume business - as Skype’s recent performance shows. Ooma device despite their slick packaging had some performance issues. Buchanan wants to refurbish the company’s reputation and brand. “Clearly I have my work cut out for me,” Buchanan acknowledged, admitting that “Ooma has a black eye.” He said the company had realigned and is focusing on building a retail channel.

I think even at $250 for the package, the device is still too expensive. You can buy PhoneGnome . Despite some distinct differences, the two companies serve the same end goal of making voice calls cheaper/free. (The comparisons between the two riles up our readers.) Buchanan who has been a retail guy for a long time, acknowledged that the right price for Ooma is between $99-to-$199. But in order to get there, the company will have to overcome some serious odds.

In US, the introduction of unlimited plans and other cheaper options from say Skype, has put Ooma on the backfoot. Given that I was impressed by Ooma at the time of launch, I hope

Earlier this morning I met with Sarik Weber, co-founder of Hamburg, Germany-based mobile callback service, Cellity. He brought me up to speed on his company, but he also mentioned that they had launched a Facebook application that allows you to send free SMS messages to anyone worldwide.

I signed up for the app but also looked at the competitive landscape and found that there are around three dozen (free) SMS-related apps, but they have little or no usage. Even the best ones get about 500 users a day, though most have fewer than 50 daily users. (Related story: 5 Ways to SMS for free.)

The state of these SMS apps is no different from many social voice applications (voice widgets). The only difference being that the VoIP widgets have high incidence of installs but comparatively low daily usage.

These two examples make me question the viability of Facebook as a communications hub. Our columnist Daniel Berninger has eloquently made an argument for a social directory that uses Facebook and other social networks to break away from the current paradigm of numeric phone numbers.

He is part of a group that believes social networks could be used to authenticate our “communication” relationships. I don’t necessarily disagree with Daniel, but the usage metrics of SMS and voice apps makes me wonder if Facebookers really want to do anything more than throw Vampire Bites, Scrabble and pretend to have a lot of friends.

One of the most important calls I make during the week is the one to my mother, followed by another one to my baby brother. These are international long distance calls, and for the first 15 years of my American life, those calls went over AT&T’s wired or wireless networks, forging a very special bond with Ma Bell.

This past year, however, that bond has been broken. AT&T has been replaced by Truphone, a UK-based mobile VoIP company that offers better quality voice calls at lower rates and doesn’t require me to own a landline. A WiFi-enabled Nokia phone is all it takes. (These days, I am totally in love with my Nokia E61.)

Truphone has become indispensable to my work and personal life, and perhaps that is why I’m glad to learn it just raised a whopping $32.7 million in Series B funding from “new investors,” although the company wouldn’t name names. Previous investors who have pumped in over $24.5 million in Series A funding — Burda Digital Ventures, Eden Ventures, Independent News & Media and Wellington Partners — came back with more cash as well.

Truphone recently acquired Sim4Travel, a company that made cheap cellular roaming possible. Alec Saunders points out that, with that particular acquisition, Truphone can extend its footprint beyond expensive Nokia WiFi-enabled phones. This has been Truphone’s Achilles heel and had limited the company’s growth prospects.

This is the crucial point. Even though Truphone has made great progress, the mobile VoIP game is still about cheap minutes and low-cost SMS. And that business is all about volume. I just hope Truphone can build that volume — this is one service I really want around forever; if it’s not, I will get an earful from mom.

eBay reported its first-quarter earnings today, and there was nothing impressive about the results, especially their core auction-related business. On the other hand, Skype seems to be doing pretty well.

Skype continued its strong growth trajectory, reporting $126 million in revenue for the quarter, representing 61% year-over-year growth. Skype added 33 million registered users in the quarter, ending the period with more than 309 million registered users around the world. Skype now has the largest registered user base within eBay Inc.’s portfolio of businesses.

Those are impressive numbers. For the fourth quarter of 2007, Skype revenues were $115 million and there were more than 276 million registered Skype users around the world. No wonder Skype Journal’s Jim Courtney is able to make the argument: Skype is thriving. What do you guys think?

This morning a lot of analysts are weighing in on eBay’s earnings. I culled out the bits about Skype to share with you folks.

Mark Mahaney of Citi Research writes:

While its Transactions revenue growth rate slowed to 62% Y/Y — down from 80% Y/Y in Q4 — the segment’s usage metrics improved. Key was the acceleration in Skype Out minutes to 1.7B, up 33% Y/Y, vs. up 10% Y/Y in Q4.

And from Ben Schachter at UBS:

And although user growth at Skype is still solid (though decelerating), eBay has yet to drive any meaningful synergies between stand-alone Skype and its core business. Management does plan to test possible synergies more aggressively this year, but time will tell (we are dubious).

Now these are two very fine analysts and I respect them quite a bit, but I think Skype has regained some momentum, despite eBay. (My big piece on what eBay should do with Skype is going to be published over the weekend. Watch out for it. )

Freeswitch has been quietly growing in both popularity and stability, not as a direct competitor to Asterisk, but as a fully featured, carrier-grade Softswitch. Get the full lowdown on Freeswitch over on Ostatic, our open source blog.

Now that the haze of exhaustion has worn off, I’m reviewing my notes from CTIA. Our cheat sheet was spot on — with the exception of an Android phone, that is. The same prototypes were available that folks saw in February at the Mobile World Congress show in Barcelona, but there was no actual handset there with which to muck around.

Another disappointment was Sprint’s delay of the launch of Xohm until later this summer. Yet even despite the sense that LTE has gained the upper hand with existing carriers, plenty of vendors were showing WiMAX products. But really, the real news at CTIA this year was around the services that can be delivered over a mobile phone, not the phones or the networks on which those services will be accessed.

I left the mobile TV news to NewTeeVee. On the handset side, touch phones reigned, but there was little else to get excited about. Speech recognition, however, has really gained credibility as a navigation tool with a product launch by Yahoo of its speech-powered oneSearch product and several announcements from Nuance Communications, ranging from voicemail to text to a navigation partnership with TeleNav.

Which brings me to the space that I believe will have the most impact on my life in the near term — Internet-connected navigation services. Om has covered the Dash Express, which is designed for the car, but CTIA made me rethink my plans for a Dash and refocus on my phone.

In June, the Samsung Instinct will combine voice, turn-by-turn directions and an unlimited data plan to produce the BLT of personal nav devices. Allowing voice input and output without forcing me to pay an extra $10 a month to access the service makes me consider changing carriers. I also learned about Dial Directions, a voice-activated search service accessed by calling DIR-ECT-IONS. Simply state your current location and where you want to go, and the service will text you turn-by-turn directions. Some of the navigation options from Wayfinder were useful as well.

Indeed, this year the excitement centered on mobile phone services rather than the phones themselves. For carriers worried about, in the words of Vodafone CEO Arun Sarin, becoming mere “bitpipes,” such an emphasis represents both a worry and an opportunity.

Playing with the Instinct, Samsung’s answer to the iPhone, is a fun experience, but not one I could handle on a daily basis. The touch interface is nice, with a satisfying vibration each time the phone registers a touch command, but lacks an accelerometer to register the changes in direction, like the iPhone has.

The Instinct will be available in June, and it appears to have all the features a consumer could dream of wanting.
In fact the phone has so many features crammed onto it, and it’s such a small device, that it was hard to do things without accidentally taking a picture or hitting one of the three hard-wired buttons on the bottom. The same thing happens on my BlackBerry Pearl, however, so my fat fingers might be the problem.

The navigation feature, which is powered by TeleNav and incorporates voice-activation technology from Microsoft (acquired through its TellMe acquisition), was my favorite. I could just tell the phone the name of one location and it would bring up a list of others nearby. Click on a car icon and it figures out where you are and then offers turn-by-turn directions to the place of your choosing. The icon will also appear near addresses in emails, eliminating one step in getting directions.

The phone uses a proprietary Samsung- and Sprint-developed operating system. The software-based keyboard can be used in landscape mode or vertically. When web searching, the keyboard contains a handy dedicated “.com” key. Surfing was easy and you could drag your finger across the screen to navigate down the page.

The television service, provided by Mobi, is still under development, so was slow to load and pixelated. Downloading music was easy, although the files downloaded from the Sprint store were a scant 1 MB, which makes me wonder about their quality. Battery life is about 5.5 hours, according to a spokeswoman, which includes a mix of talking and data usage. The phone will also come with a second external battery.

The best part about the phone seems to be that these features will be available under Sprint’s unlimited plan. That includes, texting, talking, navigation and data. But without an idea of what Sprint plans to charge for the phone, it’s hard to say how this stacks up against the competition that is similarly aimed at challenging the iPhone. And although not as intuitive as the iPhone, if the price is reasonable, given how many services Sprint includes in the plan, the Instinct may be a bargain.