For the past few days, the VoIP community has been indulging in a bit of soul-searching. The debate: Is VoIP dead? To pragmatists such as Alec Saunders, the answer is yes. In his well-reasoned polemic, “2008: The Year VoIP Died,” he succinctly writes, “Voice over IP is just a transport and signaling technology. It’s plumbing.” Harsh, but true!

Of course, on the other side of the debate are folks such as Jeff Pulver and Jon Arnold, both with deep interests in the success of VoIP, who seem to think that VoIP is in for a renaissance. Pulver argues that we are going through Internet Communications Continuum, or “the continued evolution of the IP Communications Industry. In my case, this continuum represents all forms of IP Communications, including: VoIP, Instant Messaging, Presence, IP Signaling, Internet TV, Unified Communications, Social Media and more.”

They continue to think of VoIP as a revolution. The reality, however, is more mundane and as Alec said, boring. Where do we come out on this debate? On the side of realism. About two months ago, Ian Bell on our behalf analyzed the state of VoIP and why it was “dead.” We were egged on by some comments made by Skype’s general manager of voice and video, Jonathan Christensen, at an industry conference a few weeks ago.

Towards the end of that post, Ian pointed out that the current spate of problems facing the VoIP sector was lack of imagination on the part of the industry because its players went “after low-hanging fruit and forcing their innovations to be defined within the walls of the PSTN.” It is not just the failed voice service providers who took the easy way out, but also the so-called social voice innovators.

My friend Daemon sees a lot of hope in the new services that are emerging, but I remain skeptical. Not because I am a hater. Far from it. It is just that the VoIP landscape is littered with carcasses of companies that represented mediocrity and marginal ideas. There is some hope on the horizon, but we have been fooled before.

What side are you on?

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Posted by Om Malik on GigaOM  |  Permalink  |  59 Comments
Tags: EQO, Jaxtr, skype, VoIP, Vonage

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.

It is still hanging around, thanks to $10 million venture capital infusion it received in June 2008 from Lehman Venture Partners. They fell from my active-coverage list. Today they sent over a press release touting Freeconnect, their free member-to-member calling service, that has been tried unsuccessfully by other VoIP start-ups.

FreeConnect is easy-to-use. Jaxtr members simply enter the number of the jaxtr member they wish to call. Jaxtr will then give them a local number to reach that person. Once they initiate the call, jaxtr notifies the person they are calling, and will give that person a local number to call, too – allowing the parties to connect directly. They can then talk for as long as they like, free of any charge from jaxtr. These assigned local phone numbers can also be used again by the same parties on an ongoing basis.

That announcement made me feel like Rip Van Winkle who just woke up. If my memory serves me right, this is just another variation on Rebtel’s initial model, one they launched with back in 2006. After realizing that they weren’t going anywhere, Rebtel (somewhat) re-focused and now (supposedly) makes a decent living. The whole process of using Jaxtr to make free phone calls seems so cumbersome and in this day of increasingly cheap wireless plans – almost pointless.

Now even if Jaxtr’s new offering does become popular — odds of that happening are lower than chances of baseball slugger Manny Ramirez returning to Boston — how is Jaxtr going to make money? Free calls don’t make money but they surely incur costs. Advertising isn’t going to cover the costs — at least not while this deep recession lasts.

“We believe a big portion of the free callers will convert to paid calling… The number of people who do that can make up for the people who only do free calls,” Bahman Koohestani, chief executive of the company told VentureBeat.

Maybe I should offer to sell him an investment opportunity in Bernie Madoff’s fund!

You should check out my twitter conversation with Jaxtr co-founder. 1. 2. 3. 4.

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Posted by Om Malik on GigaOM  |  Permalink  |  21 Comments
Tags: EQO, free voice calling, freeconnect, Jangl, Jaxtr, TalkPlus, VoIP

The bad news for mobile VoIP startups keeps coming. EQO, which had cut nearly 65 percent of its workforce about two months ago, might have finally hit the deck and be down for the count, according to Canadian technology news site, Techvibes.

In response to my previous post, EQO CEO Bill Tam said that cuts would allow the company to operate near profitability. He also claimed that the company had 2 million users, was doubling every eight weeks and growing its revenues. Apparently, that wasn’t enough.

EQO had raised about $13 million and was trying to sell itself, but apparently it didn’t find any buyers, according to the report. Some of my sources are confirming this shutdown. There has been chatter about VCs trying to claw back unspent cash, though I have not been able to confirm it. Some senior executives, including CFO Laura Colwill, have been job hunting. A sure sign that the party is over: information about the management team has been removed from EQO’s About Us page.

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Posted by Om Malik on GigaOM  |  Permalink  |  8 Comments
Tags: EQO, laura colwill

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

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Posted by Om Malik on GigaOM  |  Permalink  |  14 Comments
Tags: EQO, Fring, Jangl, Jaxtr, Mobile VoIP, TalkPlus, VoIP

EQO Communications, a communications company based in Richmond, British Columbia (just outside of Vancouver), that made waves at Demo 2006 and raised a total of $13 million in two rounds of funding from GrowthWorks, BDC Capital and Ventures West, is rumored to have cut nearly 65 percent of its work force — reducing the number of employees from 35 to 12. The news was reported by Techvibes, a Canadian startup-related publication. I have called their marketing manager for a comment but had not heard back as of press time.

When it launched, we were intrigued by EQO because it was one of the first clients out there that allowed you to make Skype calls from a regular phone. Making Skype mobile was an opportunity that slipped away from EQO mostly because competitor iSkoot was better funded and had a better execution strategy. In August 2006, EQO got into a bit of a tiff with Skype. The company then refocused on social networks, but it seems even that strategy didn’t go anywhere. EQO raised another $9 million in August 2007.

Funny thing about these rumored job cuts is that the company has been supporting more and more mobile phones and was supporting all high-growth devices. The job cuts, if true, don’t bode well for the long-term health of the company. VoIP as an industry has proved to be hard nut to crack for startups, especially those aiming for the consumer market. Jangl and TalkPlus were two startups that hit the deck earlier this year. We are going to see more of these “save money on LD” phone apps with no discernible business model and relatively little traction or loyalty to follow suit. 

• Approximately

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Posted by Om Malik on GigaOM  |  Permalink  |  20 Comments
Tags: EQO, VoIP

Jeff LaPorte, co-founder and chief architect at EQO Communications, has come-up with an IM Map of the world using his company’s IM interconnect capability, showing each country seems to have a preference for a different IM network.

For instance, 77.18 percent of Argentineans love MSN, followed by 9.99 percent who love GTalk. Mexicans (83.72 percent), Brazilians (77.18 percent) Dutch (65.41 percent), French (68.01 percent), Italians (60.45 percent) the Turks (75.6 percent) are all big MSN users. In many parts of Asia, Yahoo is big.

In Germany, however, they heart ICQ, while in the United States AIM (35 percent) still rules with Yahoo (25 percent) and MSN (23.93 percent) getting the silver and the bronze. GTalk has just over 12 percent share in the United States — a surprisingly large number. Another surprising fact about the numbers is how marginal AIM is outside of the States.

My only quibble with this data: Why no Skype, which is a very popular IM client/service across the world? If I remember correctly, EQO started off by offering mobile access to Skype, but later changed its game after being ignored by Skype.

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Posted by Om Malik on GigaOM  |  Permalink  |  14 Comments
Tags: AOL, EQO, google, GTalk, IM, Jeff LaPorte, MSN, skype, Yahoo