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There are seven or eight over-the-top communications apps with over 100 million users but little or no revenue streams — it’s only a matter of time before there’s a big wave of consolidation in the market. But which companies will get acquired and what happens to the companies that don’t get a buyout offer?
At a panel at GigaOM’s Mobilize conference Vonage(s vg) CEO Marc Lefar and Rebtel CEO Andreas Bernstrom both agreed that the biggest companies like WhatsApp and Viber would eventually find themselves as part of big internet giants such as Google(s goog) or Facebook(s fb), but Lefar and Bernstrom differed on what would eventually happen to the handful of big OTT players — and dozens of smaller ones — that don’t get subsumed in the consolidation wave.
Bernstrom thinks many of those companies will just fizzle out. Some will innovate and using their networks for more than voice and messaging providers; for instance, Rebtel is evolving into an international cash remittance provider, while others will simply succumb to their lack of business models.
“There’s a bit of a Mexican standoff right now,” Bernstrom said. “Everybody is waiting around to see what will happen.”
Lefar, however, doesn’t think the situation will be so dire for the smaller players. If they don’t get bought mid-tier OTT providers can team up. By interconnecting (or federating) their messaging and communications services they could effectively create globe-spanning communications networks that could even surpass WhatsApp in size (WhatsApp recently reported it had 300 million active users).
“I believe federation has to happen,” Lefar said – these companies have invested too much money into building their services and networks. To cross-connect, say, Kik and Pinger the two companies would have to build joint databases so customers on one network could identify their friends on another, Lefar said. But once that issue of identity is worked it’s just a simple of matter of tapping into each other’s communications APIs.
Check out the rest of our Mobilize 2013 coverage here, and a video embed of the session follows below:
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A transcription of the video follows on the next page