Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home IT Management
    • IT Management

    No Ringy-Dingy

    By
    eWEEK EDITORS
    -
    January 29, 2001
    Share
    Facebook
    Twitter
    Linkedin

      The days of the free phone ride appear to be numbered. Companies have been dropping — or at least rethinking — the provision of free calls over the Internet from personal computers to standard telephones.

      The market conditions causing well-established Internet telephony companies such as Deltathree, Net2Phone and PhoneFree.com to re-evaluate their offerings also led to the recent shakeout of free Internet service providers. Both types of providers are turning to standard pay-for-service models, because advertising alone didnt pay the bills.

      “We took it out behind the shed last Thursday and shot it,” said Jan Horsfall, president and chief executive of PhoneFree, referring to free PC-to-phone service. In a Jan. 18 e-mail, Horsfall informed PhoneFrees registered users that the company was abandoning free PC-to-phone service and would begin charging 2 cents per minute.

      Horsfall said under current market conditions, specialized media companies cant sustain themselves solely with ad revenue, and wont be able to anytime soon. A year ago, PhoneFree charged $20 for every thousand times an advertisers banner appeared on the site. By November, the company charged only $2.

      Deltathree ended its free PC-to-phone service in November, and now offers penny-per-minute rates for the same service.

      The two biggest Internet telephony carriers, Dialpad.com and Net2Phone, are holding onto the free model — for now, anyway. But Net2Phone mentioned in its last quarterly earnings call that it was considering moving from the free model.

      “Are we going to offer free services forever? No. Will it end tomorrow? No,” Sarah Hofstetter, a Net2Phone spokeswoman, said. Right now its cheaper for Net2Phone to offer free services to existing customers than to market pay-services to new ones, she said.

      Brad Garlinghouse, chief executive of Dialpad, however, is sticking to his guns with free PC-to-phone service. “We havent had any pressure to stop offering [PC-to-phone] for free,” he said. “Were on a path right now that delivers shareholder value, and if we find evidence that suggests otherwise, well consider making changes.”

      But Aurica Yen, an analyst at The Yankee Group, said providers cant rely just on advertising or churn through financial resources, because of the market downturn and investor demand for profitability as opposed to growth.

      “Advertising-supported models should never be the sole revenue driving the business,” Yen said. “These companies have realized that, and changing to a fee-subscription model makes sense.”

      But most of these companies are looking at other avenues to gain revenue. The whole purpose of offering the service for free was to upsell fee-based services such as calling cards and Internet phone devices. Dialpad and Net2Phone have made inroads partnering with Internet powerhouses like America Online, AT&T, Microsoft, Netscape Communications and Yahoo!, packaging voice services with Internet access and instant messaging.

      And all of these Internet telephony companies have broadband strategies in the works that include voice devices and applications that will be resold by broadband service providers.

      eWEEK EDITORS
      eWeek editors publish top thought leaders and leading experts in emerging technology across a wide variety of Enterprise B2B sectors. Our focus is providing actionable information for today’s technology decision makers.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×