Thursday, October 4, 2007

Money for nothing and the VoIP for free?

This week e-Bay had recognized that Skype did not deliver its promise and we understood that hundreds of millions of VoIP subscribers does not translate immediately to billions of dollars in revenues.
Even with billions of call minutes, the low margin on per minuteVoIP calls and the aggressive-to-insane competitors subsidizing free calls, made VoIP entrepreneurs and service providers realize that the per-minute/ flat-fee subscription models are not the right business model for them.
There are two main alternative business models to the old subscription model which are:

  • Ad-sponsored VoIP
  • Connection to expert

Ad sponsored VoIP startups are eavesdropping to the conversation and offers subscribers advertisements related to the conversation topics.
Some of those companies are:
PuddingMedia – Israeli startup providing ad- sponsored free calls, the advertisements are based on automatic speech recognition to match advertisement to call topics.
AdCalls – Just as the name says, free calls in exchange for advertisement and the right to call your friends whenever they like.
Voodoovox – yet another ad-sponsored call company.
Advertisement in search engines are well accepted, advertisements in email services are less popular and advertisement during phone calls are not welcomed: with call costs ranging between a few cents per minute to free, Ad-calls companies will have a hard time persuading clients to use their services.


Another popular business model is the connection-to-expert service. In this business model the service provider connects a client interested in consulting services with an expert that could assist him. The revenues from this model are taken as percentage of the expert consulting fees and not as “VoIP minutes”.
Some of the companies which provide such services are:
Liveperson / Kasamba – Liveperson is the leading chat and VoIP application for web sites which recently bought Kasamba, the expert advice company, the cooperation and synergy between the companies is interesting.
LiveMDexpert is another company providing medical consulting services including VoIP video and medical data via flash without the need to download anything
Bitwine uses Skype in order to connect advice seekers with experts

The expert connection seems like a profitable business model although its market might be small at the moment, we will see if expert connection companies could grow it to include other forms of interaction besides expert consulting, maybe dating?