TheGlobe Does VoIP - Page 2

The two voiceglo POPs, meanwhile, provide redundancy. They're set up with an automatic fail-over mechanism so that if one goes down, traffic will be diverted through the other.

According to Cespedes, the important difference between Vonage and voiceglo is in the cost structures of the two companies. He claims it costs Vonage $300 to $350 to acquire each customer. His costs, because he intends to work through distribution almost exclusively, will be much lower.

voiceglo also has the Glophone technology and service, which Cespedes claims is unique. "What nobody else can do that we're doing [with Glophone] is mapping a phone number to a dynamic IP address," he says.

It means users can log on to their Glophone account from any audio-equipped computer with a good Internet connection and make and receive telephone calls using their voiceglo-supplied U.S. telephone number. Anywhere.

"You don't need your own laptop with you and you don't need to download anything new onto the computer you're using," Cespedes says.

For the cost of shipping, voiceglo will send customers an earbud-style phone they can carry with them and plug in to computers wherever they go. Or they can buy a headset phone that plugs into a USB port.

USB phones are readily available from retailers, or voiceglo will sell subscribers a unit that has been "tweaked" to work with Glophone.

voiceglo vice president of strategy and business development Chris Petrovic says subscribers should be able to go into an Internet cafi, plug an earbud or headset phone into one of the computers there and make and take calls.

Will cyber cafi owners permit this? Many won't even notice if customers are doing it, Petrovic suggests. Also, many are already letting customers plug in headsets to listen to music.

"It makes sense from a business perspective [for the cyber cafis to let customers do this] because it means they'll likely stay on [the computer] longer," Petrovic says. "Whether all the Mom-and-Pop shops will get it right away is another thing."

Cespedes says the Glophone is actually what the company is most excited about because of the portability and because of the call and voice quality it offers even without a gateway device.

I tried the Glophone service using a USB phone from Plantronics, a well-respected vendor of PC and PSTN phones.

I was impressed on a call to voiceglo's offices. The voice at the other end did sound somewhat hollow and "tin-canny." However, there was no latencydelay of the voice, or break up.

And Brian Fowler, voiceglo chief technology officer (CTO) and the Glophone technology's developer, says, it's possible to improve voice quality by tweaking the Windows software.

Later calls to other numbers with Glophone were less impressive, though still surprisingly goodprobably still good enough even for business users interested in avoiding overseas long distance tolls and/or cellular air time and roaming charges.

On poor IP connections, when the two parties talk over each other, the voice from the other end is often unintelligible. In the case of one test call using Glophone, the other voice was entirely inaudible when I was speaking. This can make for frustratingly awkward conversations, but that may be offset by the cheapness of the call.

FTSWireless chairman and CEO Scott Gallagher is sold on Glophone. His company used the technology for three months before deciding to sell the products in its stores (and also through its direct sales reps).

Gallagher uses Glophone when he travels from his headquarters near Philadelphia to visit the Florida stores. The stores are Wi-Fi hotspots, so he connects wirelessly from his laptop to make calls and believes customers will do the same.

FTS is also installing voiceglo's gateway-based service as the only phone system in one of its stores. If customers know FTS is using it, they will be less hesitant about making the leap themselves, he reasons.

"Since our target demographic in the retail stores is younger people who are very technologically savvy and who are interested in utilizing all these new technologies, we think there's a significant opportunity to sell them VoIP phones," Gallagher says.

He adds, "We'll have to see how the market develops. It's a radical technology, but it's something we think has a radical upside."

What kind of partner would voiceglo make?

The talk of 40 percent margins is tantalizing. Cespedes says every deal will be different, depending on what and how much the ISP wants voiceglo to domarket, bill, provide front-line support, etc.

While it's a relatively unheralded company, voiceglo's parent, TheGlobe.com, may sound more familiar. In the late 1990s, TheGlobe, started by two young dot-com hotshots to operate a portal sites, became famous when its initial public offering (IPO) broke all records for money raised. The company's stock price multiplied 60 times in one day.

TheGlobe went on to grow annual revenues very quickly to about $50 million at their peak. But then came the dot-com bust and TheGlobe went bustthough it never went into debt. "The two founders were as vilified on the way down as they were celebrated on the way up," Cespedes notes.

He and his partner, who have started several businessesincluding Alamo Rent A Car, which they sold for $650 millionhad invested in TheGlobe in the beginning. In 2002, after the company's stock price plummeted to a penny, they took it over.

Their idea was to acquire small but profitable Internet-related companies, attracted by TheGlobe's status as a public company, and Cespedes' and his partner's business acumen. They would grow the companies and sell them off. Fowler's was the first business plan they saw.

"When we saw the potential of this, when we considered that [telephony] is such a big marketalmost a trillion dollars a yearwe said, 'Forget the original plan, let's devote all our resources to building this business.'"

Cespedes and his partners put in more of their own money and raised an additional $30 million on the stock market "which may as well have been a billion since it's so hard to raise money right now," he says. The stock has now gone from a penny to a dollar.

None of this proves voiceglo can make a success in the emerging and hotly competitive IP telephony market, of course. At the very least, though, it's an interesting company with an interesting productand one that ISPs would do well to investigate further.

Reprinted from ISP-Planet.