Telefonica to Buy VOIP Vendor Jajah

Jajah, a small Silicon Valley VOIP company, is being bought by Telefonica Europe for $207 million in an all-cash deal. Jajah's technology is designed to enable consumers and businesses to communicate over the Internet on any device and from any network. The company's voice-over-IP platform has made inroads into social networks, such as Twitter.

After more than a week of speculation about its future-including reports of interest from Cisco Systems and Microsoft-VOIP vendor Jajah is being bought by Telefonica Europe.

Telefonica, known better by the name O2, announced Dec. 23 that it is buying the smaller Silicon Valley company for $207 million in cash.

Telefonica officials said adding Jajah's technology to its portfolio will broaden the range of communications services the company can offer. It also "opens up new capabilities in the voice communication space. People using social networking sites such as Twitter now have an even wider range of communications channels available-and have the option of speaking directly to each other as well as communicating by text or keyboard," Matthew Key, chairman and CEO of Telefonica Europe, said in a statement.

The deal needs the approval of the CNC, Spain's competition agency, according to Telefonica.

Officials say Jajah's IP Communications Platform enables consumers and businesses to communicate via the Internet using any device and any network. Jajah's services can be found integrated into a range of social media and instant messaging offerings. For example, the company in September announced the beta of its Jajah@call Twitter service, which enables Twitter account holders to make free calls through Twitter.

Jajah's offerings also can be bought by consumers directly from the company.

According to Telefonica, millions of people use Jajah in about 200 countries.

"This is a very exciting union of a young, innovative company with one of the largest integrated communications companies in the world," Jajah CEO Trevor Healy said in a statement.

The mobile voice-over-IP market could eventually be a rapidly growing one, but won't take off for a few more years, according to research company Gartner.

In May, Gartner analysts said the growth of mobile VOIP services eventually will threaten traditional network-based mobile carriers, but it will take time. Mass adoption won't happen until 4G networks are more completely implemented in 2017.

However, Gartner is predicting that by 2019 more than half of mobile voice traffic will be via VOIP networks.