Putting voice in IP apps is a natural fit, but the business case is a challenge.

Applications embedding voice over IP calling into Web sites — particularly social networks — are proliferating, seemingly making good on the long-held promise of VoIP as a feature-driven upgrade to POTS, not just a way to cut costs.

A number of recent developments point to a growing trend. Vendor Jaxtr said its users have doubled in the last month from 1 million to 2 million — a significant surge. Jaxtr rival Jajah rolled out its own embedded call button last week. VoIP pioneer Jeff Pulver has begun positioning his Free World Dialup project as a social media play, starting with a Facebook voicemail application. Another company, BabyTel, is rolling out a Facebook-integrated VoIP application this week. Also on Facebook (live or in development): VoIP and click-to-call apps from Jajah, Jangl, RebTel, Truphone and YackPack, plus a nifty conference call app from Iotum. And that's just the tip of the “social VoIP” iceberg. (For a full list of embedded VoIP apps and other “telephony 2.0 services,” just visit blog.telephonyonline.com/telephony2/directory.)

“Embedded telephony is always something that has had a lot of potential,” said William Stofega, research manager for VOIP service for IDC. “It is a huge opportunity, but in order for anyone to realize it, they have to connect all the dots. If it's just PC-oriented, that's interesting, but there's more to it than that. Is there mobility? Can you take it all the way to the [public switched network]?”

It's that approach that is driving new competitors such as Jaxtr. While its click-to-call buttons are embedded in Web pages, it uses VoIP services to connect two people wherever they are, including via mobile phone or landline via unique local calling numbers (see illustration).

“These days a lot of conversations are initiated electronically: via email, instant messaging, Facebook,” said Konstantin Guericke, CEO of Jaxtr, who also was one of the founders of the social networking site LinkedIn. Jaxtr takes those interactions and gives them a voice, he said: “We make your phone do some new tricks.”

BabyTel, meanwhile, is initially focused on PC-to-PC VoIP calling, a la Skype. But by leveraging Facebook's much-touted application programming interfaces — interfaces that have literally helped launch thousands of third-party Facebook applications almost overnight — BabyTel's Telephone application is embedded completely within the Facebook experience. BabyTel runs its own VoIP network in Canada, serving residential and business customers; its new social VoIP services are “superimposed on that network,” said Steven Dorsey, CEO of the company.

“Today [with VoIP] there's too much selling on price: ‘Ours is cheaper,’” said Dorsey. “VoIP is a whole new paradigm, and this Facebook app is part of it. You just can't do that with traditional telephone service.”

That's an important distinction in the VoIP game at a time when eBay is writing down $1.4 billion of its investment in VoIP pioneer Skype, and telco-replacement services such as Vonage are now spending millions to attract new customers.

Yet social VoIP services are hardly a slam dunk. Cheap calling means finding another revenue stream — typically upgrade packages, but more often advertising. And as Web-based VoIP services continue to proliferate, user loyalty is likely to be low.

“Voice-enabled Internet applications are a large part of future voice communication,” said Keith Nissen, an analyst for In-Stat. “[But] building a stable and profitable business will be difficult.”

ONLINE

Listen to the podcast, “Microsoft and Telco 2.0,” about the software giant's role in new telephony services.
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