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Fall VON 2006 Report: VoIP is Dead...Again

When the world's leading cheerleader for Voice over IP technology changes his focus, you know that the party is over. Visitors to the Fall VON show in Boston this week found that Jeff Pulver's VON now stands for "Voice, Video & Vision" instead of "Voice on the Net" as it has in years past. I probably should have suspected something was up when most of the pre-show PR emails and calls I received were for video-based services. But then again, I've never been accused of being particularly fast on the uptake.

Pulver's refocus should probably come as no surprise given all the attention that YouTube and its surrounding cloud of wannabes have garnered recently. And since voice is so, uh, boring compared to video, it's only natural that pulvermedia should follow the buzz...and money.

VoIP is definitely not where the money is these days, given the spectacular flop of Vonage's IPO this past May - widely regarded as one of the worst IPOs in recent memory. Another sign is AOL's decision to kill its TotalTalk VoIP service in order to focus on its AIM Phoneline offering. Voice is free, and getting free-er, and if you don't have something unique and catchy to offer, you're out of business, or will be soon enough.

Skype has done its part to put the squeeze on the meager profitability that retail VoIP had and help it to join the ranks of former technology darlings. The other stake in the heart of independent VoIP providers such as Vonage is the rise of VoIP bundles from cable providers, i.e. the ol' "triple play" play. All that is needed now is for the telcos to start pushing VoIP to their DSL customers. But since that would allow customers to bypass money-making in-state calling, we probably won't see that for awhile.

Even the pre-conference session on Fixed Mobile Convergence - aka The Cellcos' Worst Nightmare - provided neither excitement nor insight, with the main take-away being "it will happen at some point with some mix of technologies". It did seem, however, that the UMA approach was voted least likely to succeed - although that could just be due to the mix of panelists that were chosen.

Monday's highlight was definitely the "IM: The State of Presence" panel at the end of the day. This session had reps from AOL, Google, Skype, Microsoft and Yahoo answering some thoughtful questions posed by moderator Carl Ford of pulvermedia. Although there were no competitive fireworks, there were a few interesting factoids that emerged:

  • Mike Jazayeri (representing Google Talk) and Nitzan Shaer (representing Skype) had previously worked at Microsoft
  • Yahoo and Microsoft pegged the percentage of monthly video IM usage at around 25%
  • Panelists agreed that there was more "broadcast / one-way" video used than two-way
  • Nitzan Shaer noted that total monthly VoIP traffic amounted to around 40 billion minutes, while both PSTN and mobile traffic run around 4-5 trillion each
  • IM penetration in the U.S. runs around 50%, vs. 80-90% (about the same as email) in Europe and Asia

There was a bit of a defining moment at the end of the session when Carl asked each panelist for his predictions for the next 18 months. Dan Casey from Microsoft and Jeff Bonforte of Yahoo both said not much could happen over so short a time. But Nitzan Shaer of Skype said that 18 months was a very long time and that a lot could happen - an appropriate view from a company that has changed the face of VoIP and IM in just three years!

Tuesday's opening keynotes included Jeff Pulver's usual state-of-the-universe talk that, instead of celebrating VoIP, reinforced his view that video is the new VoIP - at least in terms of where his focus will be. This was followed by Ted Leonsis of AOL who gave what amounted to a 30+ minute commercial for AOL's range of video products.

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