The new application is clever on the part of Vonage, a voice over IP provider that has struggled to stay viable and has attempted to provide voice calling services to smartphones in the past. But instead of going with a standalone application, the company is smartly leveraging the more than 500 million registered Facebook users and building on Facebook’s platform. And Vonage’s efforts aren’t likely to stop here. In a press release issued this morning, Marc Lefar, CEO of Vonage Holdings Corp. stated, “This is just the start. In the future we will expand on this service to include a wide range of integrated voice and messaging services that change the way people communicate.” I wonder if Vonage might be better off hoping for adoption and then an acquisition by Facebook.

Atlhough I haven’t tried the application on my phone yet — support for the iPad is coming soon, says Vonage — I like the idea for a few reasons. Most of my Facebook friends are people that I’d actually talk to, so as a platform, Facebook provides a cloud-based directory of my contacts that I don’t have to manage. Instead, each of my friends manages their own profile information, which is then pushed down automatically to my handset. Even better is the concept of calling people with the Vonage app, not numbers. Most of my friends have multiple phone numbers between work, home and various handsets, so I often don’t know where to reach them. GigaOM guest columnist Daniel Berninger once wrote about the need to eliminate the tyranny of telephone numbers and instead call each other based on our real names and identities. (I covered this topic for GigaOM Pro, as well.) Other mobile VoIP providers should quickly imitate this feature.

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Jive Software today launched what it hopes will become a Facebook-style social networking platform for businesses, complete with an activity stream for internal communications, an open API and an open application store. The company also announced that it is licensing the Twitter “firehose” — an index of all 65 million tweets that are posted to the service daily — and will be offering Jive software through the Google Apps marketplace. Jive’s launch is the latest attempt to bring social networking to the enterprise, but this is a market that has so far balked at jumping on board the social bandwagon, and the odds of failure are high.

“Enterprise is the next big opportunity in social networking,” said Christopher Lochhead, the company’s chief strategy officer. “Until now, most of the innovation in that area has been coming on the consumer side. For the most part, the last 10 years or so has been the lost decade for the enterprise, and we want to change that.” According to Lochhead, Jive is “the largest and fastest-growing social business services company” with more than 3,000 customers and a total of over 15 million users of its software platform, which is now called Social Business Software (formerly Clearspace).

Lochhead and Jive Software co-founder Matt Tucker, who is also the company’s chief technology officer, said they want to bring the benefits of social networking — and open standards — to the corporate sector, while still giving companies the control they need to achieve the security and other criteria they require. Launching today at the Enterprise 2.0 conference is a single dashboard-style view of that pulls in whatever relevant information an employee needs to know, Tucker says, whether that comes from Twitter or email or a shared document on the intranet. The company calls this view “Jive What Matters.”

Tucker says the other big initiative is an application marketplace, which will allow developers to create small, lightweight apps that can integrate into Jive’s dashboard, in the same way Google apps can be embedded into a Google custom homepage. Apps could employ features that come from Jive, the co-founder says, but could also use functions from SAP’s software if a company uses that, or other systems that are common in corporate environments. And Jive is building in support for open standards such as OAuth and Google’s OpenSocial as well.

The rationale behind Jive’s new offering seems sounds — anyone who has seen a Facebook wall will recognize the “What Matters” view instantly, and if the company can manage to pull together the various streams of information from Twitter to email to internal document feeds, it might have a shot at actually making some companies more social and more efficient at the same time. But the odds are stacked against it.

Despite the explosion in popularity of social networking tools and services over the past few years, so far no one has really extended this kind of social revolution to the enterprise successfully. The big software companies and enterprise vendors have tried in a variety of ways — including Microsoft with its SharePoint platform, which has wiki-style pages and built-in messaging, and Salesforce.com with a Twitter-style service called Chatter — but so far social networking and the corporate environment seem to be a little like oil and water, never quite blending.

In part, that could be because of corporate standards governing firewalls and security and the need for robust software that can be licensed, installed and maintained by large IT departments — as opposed to the web world of beta software, open standards and an anything-goes kind of approach to social networks and information sharing. Whether Jive’s blend of open APIs, an open app marketplace and installed software can successfully bring these two worlds together remains to be seen.

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A lot of the focus this morning has been on Vonage Mobile’s ability to use AT&T’s cellular network to make phone calls when out of range of Wi-Fi. The New York Times and the Associated Press have pointed out that Apple approved Vonage while it has put the Google Voice app on the back burner.

That’s likely because the Vonage line of apps doesn’t take over the iPhone user experience by trying to replace the voice mail functionality the way Google Voice does. (I haven’t seen the Google Voice for iPhone app, but on Android it completely takes over the calling experience, as I pointed out in my post, Meet Google, Your Phone Company.) Regardless, this focus on Google Voice is short-sighted. The bigger issue is that Vonage face a steep uphill climb in the mobile world. For rather than adjusting its business to include the mobile market at the same time as the rest of the world, it just sat there, married to its old, fixed-broadband calling model. Meanwhile, upstarts such as Truphone and Nimbuzz were founded for the express purpose of tapping into such an opportunity.

“Our new mobile app is an important step in establishing Vonage as a software technology company that enables high-quality voice and messaging across any device in any location, providing great value over any broadband network,” said Marc Lefar, CEO of Vonage, in a press release. Despite Lefar’s brave words, however, Vonage is far from being a software technology company.

Rather it’s nothing more than a seller of cheap minutes, no different than a supplier of calling cards to the local bodega. It received a delisting notice in October 2008 after its shares fell to under a $1 each (they’ve since climbed back above that threshold). In its latest fiscal period, it reported $334 million in assets and $442 million in liabilities and net income of $1 million. It’s losing subscribers by the month — 89,000 lines in the most recent quarter.

When I see Vonage, I see the telecom equivalent of a talented minor league baseball prospect with a drinking problem. Or a quarterback with a bum knee, trying to see if he can win that one last game. Unfortunately, that stuff happens only in the movies, and as we all know, life isn’t a movie.

And while Vonage claims its service saves customers more than 50 percent on calls to some dozen countries vs. rates charged by phone carriers, Skype and others offer better deals. Vonage will have a hard time getting any traction, especially against the Skype juggernaut. Even on the BlackBerry platform, it will face a significant challenge from Google Voice, which I still think is the best non-carrier calling option.

Last month, when I was talking to Josh Silverman, CEO of Skype, he told me that more than 4 million copies of Skype had been downloaded on the iPhone and iPod touch devices, making Skype one of the most popular apps in the iPhone store. And like me, many of those 4 million people have already established a billing relationship with Skype by buying cheap minutes to make phone calls overseas. It’s too much work for me to switch to Vonage at this point.

I was burned by the bad quality on Vonage about two years ago and haven’t bothered with the service since. I’ve heard of many others that have had a similar experience. In comparison, Skype is a better-known brand. With 480 million subscribers, Skype has a much bigger pond in which to fish for mobile customers. Unless Skype’s co-founders kill their own creation, Vonage is climbing a glass wall to nowhere.

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Nevertheless, this is still a wise strategy for Vonage to expand its customer base, as the company will now be able to lure people who don’t want to give up their landline phones but want the ability to make international calls using VoIP on their mobile phones.

A Vonage spokesman also said the company is working on “integrating communication products so that consumers can easily link home phones, cell phones and computers.” All of which is a significant shift from Vonage’s traditional business model, which until now has been based on replacing landline phones by selling special devices that use broadband networks to carry voice calls.

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Amongst all the burning wrecks of the voice over IP startup scene, is it possible that a $40 device hawked on late-night TV may be emerging as one of the biggest VoIP success stories ever? If you believe founder Dan Borislow, that is what is happening with his idea called MagicJack, a simple USB-based VoIP device that Borislow claims will generate $100 million in revenue this year, a market momentum that may spark an initial public offering to help fund his ambitious expansion plans.

Before we get too far into IPO dreamland, a caveat — Borislow’s company, which we wrote about when it was getting off the ground a couple years ago — is still privately held, so there’s no proof behind any of MagicJack’s claims other than your trust in Borislow’s word. That said, Borislow and MagicJack seem to have largely delivered on their main promise of two years ago, to create an easy-to-use, dirt-cheap voice service based on a simple device that you can now buy at Radio Shack or Best Buy.

Following the suggestion of one of the ardent followers of our earlier post on MagicJack — which has turned into somewhat of an ad hoc user forum board — we decided to call Borislow for a MagicJack update. (Even though I have moved on to other blogging locales myself, I am honored to update the GigaOM MagicJack followers.) As usual, the always-interesting Mr. Borislow didn’t disappoint, talking up lots of innovative ideas while dissing Skype as a competitor because of its “inferior voice quality.”

In addition to hinting that an IPO was “something we have in our mind,” Borislow said that sometime in the next year, MagicJack will ship a femtocell device which (he says) will allow users to make MagicJack-based calls from any GSM cell phone — theoretically saving cell phone minutes while in your home. Perhaps more believable is Borislow’s claim that a “major PC manufacturer” will soon include a MagicJack softphone pre-installed, eliminating the need for the USB device now necessary to link the broadband-enabled PC to a standard phone. Borislow also said there is a new device planned that will eliminate the need for users to leave their PCs powered on while making MagicJack calls; unfortunately, no ship date was given.

On the subject of number porting — the ability to switch your current telephone number to a MagicJack account, something the company has promised but never delivered — Borislow said he’d rather weather the storm of user complaints instead of subjecting potential customers to the mercies of the incumbent telcos who might hold their numbers.

“We’ve built up a lot of love over the last year or so, and I don’t want to give that love away [by making people tussle with sometimes-uncooperative telcos],” Borislow said. While he is confident that new FCC rules will help ease the number-porting pain, Borislow didn’t seem too concerned about hitting the latest self-imposed number-porting deadline of late 2009.

He also hinted of some new applications — perhaps VoIP-based conferencing — but there is only so much time and space, so we’ll leave those ideas for a day when they are closer to reality. As far as a potential IPO goes, Borislow said he took his last big company public on his birthday in September — “why not keep that love?” he asked, about using the same date.

Could MagicJack be the next big tech IPO? In this economy, who knows what the rules are? What MagicJack has in its favor is a solid network core and patentable technology. In a public statement earlier this year, Borislow claimed the company had a big network footprint with lots of hardware and interconect sites, and had patents pending for femto equipment based on designs from a chip company MagicJack’s parent company bought up along the way.

Perhaps most important is how many people are actually using the MagicJack, which is still an unanswered question. While Borislow is quick to claim that MagicJack has “sold” almost 4 million of its devices, now at a rate of “10,000 per day,” he won’t own up to the exact number of active accounts, so nobody’s sure yet whether MagicJack has passed Vonage’s base of around 2.6 million in terms of VoIP users, or whether there are a lot of MagicJacks buried unused in desk drawers. Maybe that answer can wait for the MagicJack SEC filings, where we might see exactly what Borislow has up his sleeve.

(Paul Kapustka, former managing editor at GigaOM, is the editor and founder of Sidecut Reports.)

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We’re making room for five companies that we think deserve a little more attention and/or deeper scrutiny: Qualcomm, MetroPCS, Huawei, Juniper Networks and Clearwire. All but Huawei are public companies, but Huawei is big enough to matter. This isn’t to say there aren’t tens of other companies we plan to cover closely, but since we’ve essentially upgraded a few and downgraded these others, we figured you guys might care to know what we’re thinking. If not, just skip our rationale below:

Downgrades:

• Nortel — It’s bankrupt and may never emerge. ‘Nuff said.
• Motorola — Motorola may have a great turnaround story coming, and we’ll definitely keep our eye on them, but it’s no fun to air the same old doubts every single time we mention them.
• AMD — The perpetual underdog role is wearing thin. AMD is playing second fiddle to Intel on the x86 side, Nvidia on the graphics side and doesn’t even have a mobile strategy. Splitting off manufacturing isn’t the game-changing move that AMD needs.
• Vonage — The former VoIP superstar is losing money and subscribers.  At least it stopped running those commercials all the time.
• Alcatel-Lucent — We know it just won a big Chinese equipment contract, but the company is still finding its way in a difficult environment. It’s all pretty meh.

Upgrades:

• Qualcomm — The titan of CDMA hasn’t sat back waiting for its licensing royalties to halt. We’re eager to see what it can do to make its Snapdragon chip more competitive on the graphics side and how its bets on MediaFLO and Gobi play out.
• Juniper — The networking company is planning some serious forays into the data center with its Project Stratus. What can we say? We’re interested.
• Huawei — This Chinese networking and telecommunication equipment provider is making waves in the world of WiMAX and as its home country builds out a 3G wireless infrastructure.
• MetroPCS — The budget wireless carrier is interesting because it stands to grow during the crappy economy, and because it’s planning on an upgrade to LTE sooner than most of the national carriers.
• Clearwire — WiMAX may never be the success Intel, Sprint and Clearwire hope it will be, but it will be interesting to see how and if Clearwire and its partners can parlay the first 4G network to their own advantage.

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I’m surprised that it’s managed to sign up so many customers, considering that its packages are anything but cheap. Comcast is not the only one selling a lot of voice connections — other cable operators such as Time Warner Cable are doing well and putting the hurt on traditional phone companies. The rising fortune of cable companies’ voice business is in sharp contrast to dedicated VoIP service providers like Vonage, which has been struggling to keep its early momentum. (Related Posts: Who killed the VoIP revolution? and Is Cable VoIP getting a sore throat?)

Update: * Qwest says it has 7.8 million lines, and as a result Comcast’s claim may not be quite right, though we wonder if Q is including its enterprise customers in the total to bolster its claim. We checked with them, and as expected, these include 1.3 million small business users and 6.5 million residential users. From that perspective, Comcast did make a legit claim.

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Keynote Systems recently conducted a study (link to PDF) of some of the more popular services — AT&T VoIP, AT&T Landline, Comcast Digital, Time Warner Digital, Verizon VoiceWing (VoIP), Packet8, Vonage, Lingo and Truevoice. According to their study, AT&T’s landline service was the most reliable service, while in terms of voice quality, Comcast’s Digital Voice came out on top.

I wish Keynote had not been stingy and shared complete rankings instead of these teaser results. Nevertheless, even the very limited data they made available show that pure-play VoIP services ranked pretty low, hinting at poor quality and less reliability.

More importantly, not a single service measures up to being both reliable and exhibiting good quality; and though Verizon VoiceWing is a good enough compromise, it’s not clear if you can actually sign up for the service. I tried on their web site and failed — only existing customers can seemingly log into the site.

These results align closely to my own findings — while AT&T used to work, the quality of the calls was just horrible. I could not make a single call to India without redialing. So I gave up that service and then opted for Comcast. I very quickly realized that spending $40 a month for a voice service when I could easily get nearly unlimited minutes from my mobile phone just didn’t make much sense. Good-bye, Comcast.

I would love to know which service you use and what your real-world experience is.

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In an attempt to uncover the real reason behind the release, I called a Comcast spokeswoman and asked her if this was an exclusive deal with Vonage, and if any money was changing hands. She said that the agreement doesn’t preclude others from working with Comcast, that in fact it’s working with a variety of companies and groups. And no, there is no money changing hands.

Still, the press release kept nagging at me. And it wasn’t until I read Cynthia Brumfield’s post (Welcome back, Cynthia, from your blog vacation) that I realized Comcast might have unknowingly admitted to messing with Vonage’s VoIP traffic.

What’s interesting and surprising is that Vonage is not based on P2P technology, unlike Skype and other competitive VoIP providers. So this effort by Comcast, which extends to a seemingly unrelated “over-the-top” technology seems, well, out of the blue. Has Vonage had problems with Comcast causing problems for its customers, problems that stemmed not from the same kind of packet reset technology that spurred the initial controversy?

Well I don’t know about recently, but some two years ago a lot people complained about Vonage’s service quality on Comcast. Comcast, of course, denied that it was blocking Vonage traffic.

That was then. However, the fact that the two companies are announcing a new working relationship has me wondering if Comcast was messing with Vonage’s calls all along — you know, as part of its “network management.”

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AT&T, long before it merged with SBC had made a half-hearted attempt at getting into consumer VoIP by selling a service called, CallVantage. It was surprisingly good, especially its call quality. Unfortunately, the company never quite made the commitment to it. And when SBC merger happened, well it fell victim of save-your-mentality that comes with it. Today, there is word that AT&T has stopped pushing the service through its affiliate channels – a sure sign that the company is backing away even further and would shut it down soon enough. Some believe that shut down is going to come next year, though I thought it was already killed, since the former AT&T Callvantage boss is now running AT&T’s CDN business, and we have not heard a single pitch from the company in over a year. I guess this is one less thing Vonage has to worry about!

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It’s hardly a surprise, as a lot new additions are coming from people buying triple-play services from cable companies. As of the end of the first quarter of 2008, here’s how the cable VoIP data broke down:

* Comcast: 5.1 million
* TimeWarner: 3.17 million
* Cox: 2.46 million
* Cablevision: 1.68 million
* Charter: 1.08 million

Cynthia Brumfield puts the total VoIP lines shared by the top nine cable providers at just over 14 million. The cable guys added about 1.3 million new subscribers. Most of them are refugees of phone companies who are losing customers by the day, as we have previously noted on more than one occasion.

The guys at Telegeography say that since the start of 2007, the three regional Bell Rperating Companies (RBOCs) — AT&T, Verizon and Qwest — have lost 17.3 million residential telephone lines, while VoIP service providers have gained 14.4 million new customers. Nearly 80 percent have come from cable companies.

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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.

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Akamai also said it would seek an injunction to stop Limelight from continuing to sell infringing services. Limelight issued a release saying it was disappointed and would appeal the verdict, which means a trip to Washington’s U.S. Court of Appeals. For a program guide to how this may play out, see our previous coverage of the Verizon/Vonage patent lawsuit.

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