Valleywag
At first I was loath to even join in what Uncov calls the "A-list rub and tug" on Ooma, the telecom startup launched by Andrew Frame, the entrepreneur who looks like a model, and Ashton Kutcher, the Hollywood star who actually was a model. Like its founders, Ooma is all looks, no substance. Launched late, Ooma's product, a piece of hardware that lets you place free phone calls over the Internet, looks set to flop, as insiders predicted, because its creators fundamentally misunderstand both consumers and technology. But at least the box, like Frame and Kutcher, is pretty. Read on to learn why looks don't matter in telecom — and why we're putting Ooma on immediate deathwatch.
Ooma's main attraction, of course, is that it offers free calling. Free, that is, if you don't count the $399 cost of the Ooma Hub, a pretty but ridiculously overpriced piece of technology. Plug a regular phone into the Ooma Hub, and you'll get free calls placed over the Internet — just like the free calls you get via Skype and countless other voice over Internet protocol, or VOIP, services.
The Hub does one clever thing: It lets you keep your existing wired phone line for 911 service and for backup during Internet outages. But you could do the same thing yourself by simply calling the phone company and signing up for its cheapest service. (I'm surprised, frankly, that the normally sharp Walt Mossberg didn't notice that fact.)
The problem with Ooma's business model is that no one's going to pay $399 for a device that lets you do something you can already do. If you have DSL or cable, your broadband provider has likely thrown in voice service — and equipment — essentially for free. Everyone from AT&T on down offers VOIP plans with subsidized equipment. And 20somethings — the tech-savvy early adopters who might otherwise flock to Ooma — have ditched landlines altogether. Why would they start tethering themselves? Just because Kutcher gives them a dreamy look? I don't think so.
The wireless industry has proven time and time again that people would rather pay more per month and get a cheap phone up front. The same dynamic has hobbled TiVo; faced with the choice of paying hundreds of dollars for a TiVo box, or renting a subpar digital video recorder from their cable company, they go for the rental.
We're not worried for Frame or Kutcher. We predict Kutcher will soon head back to Hollywood — and with his looks, perhaps Frame, who bears a noted resemblance to George Oscar Bluth II of "Arrested Development," will follow him there. We wish him better luck in the movies.
Comments
Ya, the guy in the eight thousand dollar suit is TAKING ADVICE from a blogger who doesn't make that in a month. COME ON!!
"The Hub does one clever thing: It lets you keep your existing wired phone line for 911 service and for backup during Internet outages. But you could do the same thing yourself by simply calling the phone company and signing up for its cheapest service.(I'm surprised, frankly, that the normally sharp Walt Mossberg didn't notice that fact.)"
You mean like: "If you do keep your standard service, you can reduce it to a very basic, low-cost plan, just for 911 and backup." quoted from the article? :-\
But more importantly, how come LinkSys didn't add this feature into THEIR product?
deathwatch might be a bit premature. ashton could do just a single cameo to keep the thing funded for a year..
@AceKiller: I'd guess that most folks have their home telephone as a "very basic, low-cost plan, just for 911 and backup" already.
Good call on the deathwatch though, this is probably junk.
I'm a very happy Vonage customer. I'd never switch to Ooma... at least Vonage provides some kind of a QoS... this layer 7 P2P stuff is highly unreliable.
hah - for about 100 bucks less, you could scoop up a slightly larger device that does the same thing plus runs windows and openoffice at walmart...dumb. didn't know there was hollywood money in there, thanks for the headsup...now i know to run the fuck away when the mailers arrive..
There is a restaurant in Artemas, PA called the Roadkill Cafe, their motto is "you kill em, we grill em". Think of it as the parallel universe counterpart to Bucks, maybe an appropriate place for startups to go after they file BK (cheap eats too).
[www.palestars.com]
Unless it's changed, you don't even need phone service to dial 911 - just plug your phone into a jack.
@BH: I'll bet you an Ooma box (loser gets it) that Ashton Kutcher is not putting a cent into this company. He'll have equity in exchange for allowing them to bask in the attention-getting glow of his celebrity, and it's working. Back in the final days of the last dotcom boom, I worked for a tech company whose chairman was a well-known celebrity. He got 40% of the company for showing up to board meetings. It was no small source of satisfaction to me that my share and his share both ended up being worth exactly the same :)
@Jeremy: Nah...they still disconnect the pairs to recycle them. Cellphones still work even without service...'cept of course the JesusPhone.
@AceKiller: No, I was wondering why Mossberg didn't point out that you could reduce your regular phone line to a basic plan for 911 -- and not buy an Ooma Hub at all, thereby saving yourself $399. He's usually better at spotting such obvious cost-saving opportunities.
A little late into the game and plus that $400 up front cost. Ouch.
I totally thought that was Gob at first.
Interesting that the column should be titled "deathwatch", which implies that ooma was alive in the first place. I think, rather, that it was DOA.
For many reason, which I have detailed at ooma-revealed.info, what ooma is offering is impossible to do in a way that would provide "free" service for life. In fact, their own web site says, in the "fine print", that "forever" is only guaranteed to be 3 years.
Even if the basic premise of using other people's phone lines to complete calls would work, the incentives (and possibilities) are there for everyone to disconnect their own landline from the ooma network, as well as to force every one of their own calls to go through an ooma Gateway, thus depriving ooma of any "free" termination points. ooma would then have to pay for every call termination.
Insane Dead on Arrival
Vonage has proven that even being first to market and with good service. Excllent management great pricing . There is no money to be made in VOIP unless you are already in a monopolly position like the cable companys. If you want free service try IPKall and Free World Dialup and its all totaly free
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