In our last post, we discussed how GTalk2VoIP brings SIP capability to your instant messengers. Continuing our discussion with Ruslan Zalata, co-founder or GTalk2VoIP, today we will talk about SIP strategies of Google, Yahoo, and Microsoft. The interview extract follows (AS – Alok Saboo; RZ – Ruslan Zalata):
AS. GTalk2VoIP is essentially filling a gap by bringing SIP services to the ubiquitous instant messengers. Why do you think, Google, Microsoft, or Yahoo are not providing such a service themselves?
RZ: It’s about four years have passed by since we started our service. During all this time we cannot help hearing that Google, MS or other Biggie “just almost ready to deploy” a SIP/VoIP service, which will definitely kill ours and make whole consumer VoIP business seamless. Perhaps one day one of the biggies will finally come up with such a killer service, yet there are some obstacles I believe different to each company, preventing them from starting a killer VoIP service. Here are my personal thoughts:
Microsoft. It’s a huge software development company. All their revenue comes from selling desktop (and very few mobile) software. It’s no secret that Microsoft has made a number of attempts to enter VoIP business or online business game, all of them failed or are about to fail. I conclude that Microsoft is just not a proper company for online business, mostly because they got used to super-profits which are hardly achievable on the net due to stiff competition from small startups and low cost of switching for users. This company is no competitor to any online service.
Yahoo. It’s strictly opposite to Microsoft – an online business only company. The problem with Yahoo is that they are incredibly greedy control freaks. Yahoo’s Voice service is pure SIP except that it was intentionally protected with a nonstandard challenge algorithm. Why did they do this ? Because they don’t want their users feel freedom and power of choice. And this is very right decision from marketing point, otherwise they would lose all their customers long time ago (if they have not lost them yet).
Google. It’s very different. Google is damn big and damp popular and this is their Achilles’ heel. They can do virtually anything or start any service. Yet, even Google has problems. Why do you think they don’t offer Google Voice outside of US ? The answer is very simple: because VoIP is very much regulated almost in every other country (esp. when you deal with phone numbers or do offer PSTN termination). Obeying to regulators drastically increases expanses on running such service and the bigger the company the more interesting it becomes for regulator to milk it, sue it, ban it, etc. You have to remember that Google, unlike Skype which is hiding in Liechtenstein, has official offices in many countries (including such VoIP haters like China and UAE). Another thing is, 100% of Google’s revenue comes from advertising on the Web. It’s still unclear how VoIP can fit into this business model. And this, I believe is one of the reason why Google Talk is a dead project inside Google – they don’t know how to monetize it, neither directly nor indirectly. And is also the reason for appearing GoogleTalkGadget and Gmail Voice and Video plugin. Web is their everything, pure VoIP is nothing but a headache.
It is known that inside Google they use a version of Google Talk which supports SIP and allows PSTN calling, but they were not able to make it publicly available because they smashed against this uncertainty of “regulation” problem. There are no evidences that it can be solved in near future.
It’s interesting that there’s a trick to access Google Voice through our GTalk2VoIP service from any country and we have some users who are very happy with this possibility. I’m not going to describe it publicly because I don’t want Google to ban this feature :-) .
AS: I just had a post earlier about how Google Voice perfectly fits in to Google’s strategy. Google gets user data and can then use it to target its services better. May be all the theory is wrong, but if it is the case, would your response about Google change?
RZ: How much personal data does an average Google Voice user does share with Google beside a bunch of phone numbers ? How much of that data can be used for contextual advertising ? None I believe. The only way for Google to monetize on any VoIP service (beside selling minutes) is to build a massive Web service around VoIP service, somewhat like Gmail for SMTP, then enforce users to share a much of their “sensitive” data as possible during usage of this hypothetical Web service, then sell contextual ads. The problem, as I already mentioned, is cost. Gmail, search and others have nearly zero cost of running and have infinity possibility for scaling (cheap commodity hardware). VoIP does not! VoIP is damn expensive to run en mass! VoIP requires special costly hardware and it cannot be easily scaled like web stuff, it requires regular payouts to service providers and telephone companies. So, I believe, it can be a very hard way for Google and it’s partially off of their mainstream conceptions and traditions – it’s very different from web :-) .
AS. Now that Google is getting serious about the Voice business (there have been talks about Google incorporating SIP in GTalk), do you foresee any changes in Google’s strategy? How does it impact you?
RZ: Regarding SIP in Google Talk, please see my previous answer. There will be no SIP in Google Talk. Google Talk is dead project.
Regarding Google Voice, I don’t think Google is getting very much serious about Voice. They are just experimenting, blindly firing in all possible directions, I would say, in search of a new business model to diversify their Web-only revenues. It’s still very unclear how Google is going to make big buck on offering free Voice services. In-call advertizing will not work for sure, there had been many such offerings from different startups and even from well established telcos, all of them are dead now. Because free VoIP attracts people without money, it’s totally impossible to make them pay for advertized goods. We have had a similar negative experience with our Freeringer project so we shut it down. Charging for VoIP calls could give them some new revenues, but is not in Google’s practice or style.
Regarding Google’s future strategy towards VoIP. As I’ve said, Google is playing. I’m sure their strategy will change, they might even acquire one of two more small VoIP companies or startups, like ours, with a non-mainstream solutions to expend their current offerings, thus attracting more users. You have to remember that unlike Web, VoIP is not free to run. Google pays a lot for their Google Voice DIDs, for PSTN termination service, for SMS delivery service, for telco interconnections, etc. This is no way cheap for them. So, I think, if they won’t find a way to monetize VoIP in more or less profitable ways in next two years, they will just shut it down, same way they did to many other services. They also have to solve “regulation” problem as well as the problem with big telcos whose anger is growing fast. It’s also possible that AT&T will just sue Google to death for Google Voice and thus this service disappears in vain. Something similar already happened to Vonage, AFAIK. If Google finally manages to solve all these issue, they will create not only an exceptionally good service, but will bring whole VoIP to a new level. Let’s hope for the best!
Regarding future of GTalk2VoIP. We are strong believers in everything mobile. We believe that more and more people (esp. in developing countries) will use their mobile phones to access to more and more online services including VoIP and here we can help them solve their communication needs. During past few years we are constantly developing and improving our mobile VoIP (mVoIP) and IM chat software called Talkonaut, which is a kind of Google Talk for mobiles. It’s based on same XMPP/Jabber protocol and implements Jingle for calling (this makes it 100% compatible with Google Talk). Unlike ascetic Google Talk, Talkonaut is very feature rich, it supports very impressive list of XEPs (XMPP Extension Protocol) and has a seamless integration with our GTalk2VoIP service. It runs on Symbian S60 and Windows Mobile platforms. Recently we released Talkonaut for Android and are about to release it for iPhone. For these few years we obtains many devoted Talkonaut users. Some use it as a simple mobile SIP client, some use it as mobile Google Talk (cause it looks very like Google Talk and supports gmail accounts), some use it as a cheap PSTN calling solution. We believe and hope this segment of our user base will grow in future and more people will find Talkonaut useful and turn themselves into customers :-) . This is the direction we’ve chosen for near future of our small business.
talkonaut-logoAS: Is Talkonaut similar to Nimbuzz or Fring? Even if it is, there is enough room and you can definitely improve on their features.
RZ:Yes, Fring and Nimbuzz are main competitors to Talkonaut. Both are building proprietary solution using their own home-brew protocols, while Talkonaut is completely based on open standards and can be used to connect to any standard XMPP server directly. Hence Talkonaut can be used in intranets and on proprietary networks which neither Fring nor Nimbuzz can do. Talkonaut does not require to register new accounts, you can use any of your existing Jabber account including gmail.
Another interesting thing about our competitors’ business model is that both Fring and Nimbuzz are building their business around Skype userbase – people using Fring as a “mobile Skype solution”. Recently Skype release a fully capable application for iPhone which allows VoIP calling over 3G and merely today they released Skype app for Symbian S60 platform (I have to say that most Fring users come with Nokia’s smartphones). Availability of native Skype app for Symbian is dreadful for Fring (Nimbuzz has their userbase slightly more diversified). I think Fring is in agony right now :-) .
Thanks are due to Ruslan for his great, bold, and honest comments about some tough questions. If you have any further clarifications or you do not agree with any of the above comments, do not hesitate to drop a line. Look forward to the last part of our discussion where we will talk about ChromeOS and SIP…
P.S. While the official SIP support may or may not come from these companies, you can always use hacks to get such benefit, e.g., read our tutorial on how to enable SIP support in Google Voice.
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