Posted: September 3rd, 2010 | Author: The Morodo Team | Filed under: Uncategorized | View Comments
On Monday last week Skype filed its S1 supporting an IPO application with the SEC. For many industry observers, this was not entirely unexpected news, many commentators would have prepared their ‘Skype goes public’ blog posts months ago.
http://www.businessinsider.com/skype-files-for-ipo-2010-8
Aside from the bizarre BSkyB litigation related to alleged trademark confusion over Skype’s name, we learned a fair deal about Skype’s strategy from the S1 documentation:
Freemium as a model works – just over 6% of Skype’s 560 million strong user-base pay for service, spending USD 96 per annum each. Skype is a cash machine (just as Morodo would be once we get critical mass).
Mobile, Value-Adds and Enterprise and key growth areas – now that Skype has established relationships with several Mobile Operators, it forecasts stronger revenue from mobile. Premium value-added services and SME (Skype for Business) are named as strategic growth areas.
Securing proprietary technology cost Big Time – Skype paid cash and equity at the value of approximately USD 300 million to the Founders to secure an audio-codec license from JoltID, something that was overlooked in the original eBay acquisition. That, right there, is the value of using Open Source codecs.
A number of people have asked us what this means for Morodo. It’s all good news as far as the team is concerned. Why?
- Continued competition in the Mobile VoIP space validates our business. If nobody was doing what we do, we’d be worried. We’re pleased to remain a leader in Mobile VoIP app technology.
- The Mass-Media loves Mobile VoIP. Use of an alternative voice and data carrier from a mobile has yet to reach mass-adoption. The market is open, the technology is proven (and the benefits obvious), it’s all about growth.
- The incumbent giants have awoken. We’ve been saying for some time that the big Mobile Operators would eventually adopt Mobile VoIP strategies and now they are. Interest in your company is growing.
Another big week in VoIP that brings yet more valid reasons that VoIP services and products are big business.
Posted: September 3rd, 2010 | Author: The Morodo Team | Filed under: Uncategorized | View Comments
On Wednesday Google finally launched Google Voice for Gmail causing a big splash in the media and huge waves in the blogosphere. We fielded a fair few calls asking for comment so we thought it timely to share our thoughts with you.
Google Voice is a whole lot of unrealised potential. The addition of voice calling and text messaging to Gmail has been a long time coming. The search giant bought Grand Central in June 2007, Gizmo5 in November 2009 and GIPS in May of this year. Our initial thought was: it that it? Following the cancellation of Google Wave earlier in the month, it’s a wonder that so few features have been included in this release. And most notably, why so quiet on the Google Voice mobile app?
Don’t misunderstand us; we’re not playing up the weaknesses to hide the strengths of the offer. We should be very clear and state that we do not feel at all threatened by Google entering our space. It certainly didn’t stop anyone investing in Mobile VoIP companies this week.
Many a blogger led off with talk of Google Voice becoming a Skype-killer, well, that’s as may be, but for Morodo, it’s all good news. Why? Here are some the key points as we see them:
Competition is Validation (and Free Marketing)
MO-Call has been competing against thousands of mobile operators, fixed line incumbents and VoIP companies since it’s own launch. One more player, however big, will not make a difference. In fact, the larger the alternative VoIP player, and the more marketing money they spend, the better. It’s about time the mass-market woke-up to the alternatives out there.
Profitable Pricing.
A lot of nonsense has been written about VoIP being a zero-sum game, a race to the bottom. It’s not. It may surprise you to learn that offering rates sub USD 2 cents per minute to European destinations is good margin business. Morodo can compete and be profitable.
Calling will not be free-to-all-destinations for a very long time, not whilst so many operators around the world (and let’s face it, governments) continue to earn revenue from call termination.
Mobile Applications.
MO-Call is a mature mobile VoIP application, tried and tested in the market on more than 1,800 different makes and model of phone. It’s simple to use, has a low memory footprint and doesn’t dominate the battery.
The existing Google Voice mobile app is complex by comparison and not friendly on power and processing. Many of our immediate competitors distribute huge, hungry and obtrusive applications, we say: Keep It Simple Stupid.
On the mobile, it’s about talk and text: that’s where the revenue is – that’s where the customer wants to save money.
Mobile Networks
Google is on the horns of a dilemma. A few weeks ago, in partnership with Verizon, Google provide a proposal on Net Neutrality to the FCC in the USA (the regulatory body for telecoms). If you’re not familiar with this news story, perhaps the best coverage can be found here at Circle ID.
In the light of the Google Voice for Gmail launch it is now somewhat significant that Google made their Net Neutrality play together with Verizon, the only US carrier yet to host a Skype service on it’s mobile network. We’re sure there are plenty of non-compete terms in that Skype co-op agreement.
This highlights a huge problem for Google moving forward, the ability to build a Mobile VoIP business where the carriers feel threatened. OK, you can remind us that we have written many words in the past about carriers embracing Mobile VoIP, and they are, but carriers view Google Voice in a very different and threatening light. It’s going to take a lot more than revenue share on Google Mobile Adsense and promised increased data usage before we see the search giant secure any Verizon-Skype-alike deals.
Mobile Manufacturers
Google’s Android Mobile Operating system is a massive success story. Chances are it’s a Mobile Operating System that most people who read the papers have heard of and that’s probably a first in the history of the cellphone (anyone remember Psion?).
Android’s market penetration has been led by the mobile manufacturers, the HTCs and Samsungs of this world. It’s license free, it’s completely Open Source and thousands of developers work on apps that run on it. What’s nice for Google is that the Operating System embeds some of their key services, like Gmail, on the device. Try using an Android mobile without a Gmail account, it’s a pretty poor experience.
Unfortunately for Google, these embeds and this diversity in production might not be much of a help in the long run, simply because the people that buy the most phones direct from the factory are the Mobile carriers themselves. If Vodafone are going to buy 500,000 Samsung Galaxies, you can be sure they can ask for Google Voice to be removed.
The on-device playing field for Morodo is a lot leveler than it might first appear.
Google needs to pull something special out of the bag, it’s facing increased competition in it’s core search business, it’s been battered over privacy all over the western world, it’s struggling to compete with Facebook and it’s coming off the back of a string of failed public betas.
Twelve months ago it would have been inconceivable for John Gruber to write his recent piece on CEO Eric Schmidt, now it’s par for the course that any announcement from the company will attract a round of Google-Bashing.
This time next week, a hundred blog posts and news articles will be warning you of the danger of Google data-mining your call records so it can better target ads at you.
