The End of the Minuteman

In the late 90s, selling minutes was a big and very profitable business. Companies like ITXC, IDT, Net2phone, Deltathree traded in the billion dollar range. They were innovative and created a whole new landscape.

Fast forward to 2008, IDT (and Net2phone now a fully owned IDT subsidiary) is almost done burning its 1 billion dollar pile of cash and is on the way to be delisted from the NYSE with the stock trading at around 50 cents. Deltathree, already delisted from the NASDAQ, is trading at 6 cents and rumors abound that they are about to close. Even Kayote which was founded by Deltathree veterans with a much more service orientated business model, has closed down their “minutes” operation in the last week.

The advent of Asterisk and other open source switching solutions enables anyone with a few dollars to put together a switch and sell minutes. All you need is a PC, a PRI card and you are in business. My guess is that these Mom & Pop operations put the big guys out of business.

Where does that leave us? Services, Services, Services. There is plenty of money to be made in the value added arena. Integrating and streamlining business processes with voice and video is still a big business and will be for years to come. Those who understand that will also make money from minutes as an add on. Selling minutes alone is unfortunately, as these former leaders are showing us a sure way to go bankrupt….

I think I made a mistake…

Actually 2 of them. About a week ago, I wrote about the Digium/Asterisk agreement with Skype. In my post I expressed the opinion that Skype was the winner, since in one swoop they opened up the Skype network to the business market.

In a discussion that evolved from my post, on Facebook, Olle E. Johansson (one the leading Asterisk developers) disagreed with me. Olle’s point was that networks come and go, today Skype might be popular, but Gtalk might take the lead from them in a couple of years. However, if Asterisk becomes the primary operating system for IP communication (it is on the way there!), then this will be just another deal on the way to Digium becoming the leader of the telephony/communications world ….

On second thought I must agree with Olle. The more I work with Asterisk, the more I realize that the sky is the limit!

My second mistake concerns my post on IDT, I wrote that it may be a good idea to buy the company with over a billion dollars of sales and a market cap of $50m. However after I read this article, I realised that with their current capital structure the ones who hold the keys to the company are management and it doesn’t look like they can let go… Too bad, IDT was an innovative leader at one time.

Virgo Publishing Acquires Certain Assets of Pulvermedia, Plans IP Communications Product Launch

I just received this press release which I am sure will interest anyone who covers the VoIP space.
No comments for now….

For Immediate Release

Virgo Publishing Acquires Certain Assets of Pulvermedia, Plans IP Communications Product Launch
PHOENIX — October 1, 2008 — Virgo Publishing, a business-to-business information services company, announced it has acquired certain media assets formerly owned by Pulvermedia through a foreclosure by TICC, Pulvermedia’s secured creditor. DeSilva+Phillips, LLC, the New York-based investment bank specializing in media and digital media, provided financial advisory services in this transaction.

With the assets — primarily databases and trademarks — Virgo Publishing plans to launch new industry-leading products as part of its Telecom Division.

“Virgo Publishing has a substantial presence in the telecommunications space. With the acquisition of these assets, Virgo has an opportunity to expand its leadership role in this dynamic industry sector,” said Mike Saxby, group publisher — Telecom Division for Virgo Publishing. “The benefit for our audience and our customers will be tremendous as we are able to leverage these assets into new online, print and event resources.”

Virgo Publishing produces business-to-business magazines and conferences across four verticals. Virgo Publishing’s Telecom Division includes four titles: xchange, PHONE+, Billing & OSS World and New Telephony. It also includes two trade shows: Channel Partners Conference & Expo and Billing & OSS World Conference & Expo.

The company has a track record of success in the telecom industry. PHONE+ marked its 20th anniversary in 2007, and xchange and the Channel Partners Expo each are enjoying their 12th year of success. Billing & OSS World magazine has been a segment leader for 13 years, and Virgo will host the 17th Billing & OSS World event in April 2009.

Virgo Publishing acquired Billing World and OSS Today Magazine and the Billing & OSS World conference and exhibition from TeleStrategies Inc. in September 2007.

“On the anniversary of our successful acquisition of the Billing & OSS World properties, we are confident that our seasoned team can produce results in yet another growing area of the telecommunications business — IP communications,” said Saxby.

Virgo’s telecommunications editorial team has more than 100 years of experience combined.

Virgo’s new products, which will expand on the VON brand, will be focused on IP communications technologies and business strategies for service providers and enterprises worldwide. A beta launch of a new Web site is scheduled for late October. An e-mail newsletter will follow in November. A new bimonthly print magazine will debut with a January/February cover date. In addition, a conference and expo is being planned for 2009; dates and locations will be announced soon.

“The IP communications marketplace has unlimited potential, an industry we have just begun to tap. Service providers need to avail themselves of every opportunity and resource to drive their IP communications businesses forward. Currently there’s a major void in the media marketplace targeting ITSPs. I applaud Virgo’s ambition to create such a resource for the service provider community and support their efforts. Their depth and synergies within the telecommunications markets provide them a platform from which to create industry-leading products in this growing arena,” said David Byrd, vice president of marketing and sales for Broadvox LLC, a provider of integrated managed VoIP services to SMB, enterprise and carrier customers.

“Virgo Publishing has a long track record of success in publishing and events for the telecommunications marketplace. Taqua has worked with the company for a decade and found a receptive audience among the readers of xchange. We are looking forward to the potential opportunities afforded by the new launch,” said Frederick Reynolds, vice president of marketing for Taqua LLC, a supplier of next-generation switching systems and applications.

Additionally, the database assets Virgo acquired related to the distribution community will be added to the company’s existing channel-related brands, PHONE+ and the Channel Partners Conference & Expo.