From the monthly archives: September 2007

A number of people had fun piling on to the announcement from Pudding Media that they are providing ad-supported phone calls.

 

Om Malik:

Want to know what’s more stupid: this ad-supported experiment called The Pudding…one of the more inane ideas out there… over here calls are cheap enough that most of us don’t really want to put up with the extra steps to save a few pennies. [more...]


Ouch! My local news outlet captured it very succinctly… Free Internet Phone Service, But With A Creepy Twist. More from TechCrunch, Saunders, Keating and Blodget.

 

I’m not sure why Pudding has merited more scorn than other recent announcements of ad-supported calling such as VoodooVox (which raised $8m earlier this month). Experiments in this direction have been going on for a while. And of course, even the big G is rumored to be going down this path. (Garrett Smith did the math using current ad rates and claims ad-supported calling doesn’t add up.)

 

But I think people are missing the big picture here. Routing your call “through the cloud” brings access to massive processing power and the terabytes of online information.

 

Today, we see the advertising as simply an intrusion — a way to pay the piper. But what if Pudding could really deliver useful information to us during a phone call? Their screen shot gives a useful example. If their system hears you say “Let’s go downtown tonight for Italian food.” presumably you get something like this screen shot that appear in the NYTimes article

 

Pudding Screenshot

 

If the cloud knows that by “downtown” you mean Toronto, it can do the appropriate search and show you relevant options. (It would be even better if both parties could see the info.)

 

Once you have speech recognition “on the call” lots of options open up. What if you could explicitly direct the cloud during your call?

 

“Cloud, show us Italian restaurants downtown.”

“… what’s the weather for tonight.”

“… call me a taxi.”

 

What if you could define your own voice commands (like a vocal YubNub?).

 

Once we become comfortable that the cloud is a 3rd party on our call, a world of possibilities opens up.

 

Think about this in a business context…

“Cloud, what appointments do I have next Tuesday?”

“… conference in Bob from accounting.”

“… how many units of the XL45 do we have in the warehouse?”

 

Consider the parallels to other aspects of our life that have moved to the cloud. Gmail exposes me to ads in exchange for free email service. But, I don’t use Gmail to save money. In fact, I have email options available to me that are zero-cost and ad-free. I use Gmail because I like having all of my email in the cloud, available from any computer and searchable.

 

Cloud-routing of phone calls is ultimately going to improve the calling experience.

If it’s done right you will want to make your calls through the cloud and it won’t be about saving money at all.

 

That’s what we’re working on at FōnCloud.

 

[CORRECTION: J Scott Hamilton from VoodooVox wrote to me saying "We're about ad-supported content, not serving ads." They revealed more about what they're doing in an announcement that came out a week after this post: VoodooVox: Building a Voice 2.0 Ad Network.]

 

$1 Cdn = $1 US.
It was only for a moment, but it was the first time in 30 years!
Moose Tongue

 

Whenever I talk to investors, no matter where they’re from, I always get asked why we aren’t based in Silicon Valley. Sure, there’s an energy there that you can’t duplicate. But if you want to run a software development effort on a lean budget, it really makes sense to stay put in Canada. We have a tremendous talent pool of developers here. Lower living expenses combined with universal health care leads to lower employment costs. And most importantly, we have some terrific government programs that can help get a lot more mileage out of your development dollars.

Ian Bell describes another angle I hadn’t considered…

There’s a hole you could drive a truck through in U.S. economic development and immigration policy, which represents a substantial competitive advantage for Canada… We are presently in a unique position to exploit that gap in understanding to our own long-term benefit, and give rise to a substantial economic shift benefiting the Canadian technology industry…
The U.S. is turning away creative minds (including engineers) at the border… as they attempt to ebb the flow of “good” jobs being taken from America’s labour force and handed to foreigners. At the same time, those jobs are in turn being fully-outsourced to foreigners residing overseas, as companies attempt to cope with the fact that they can’t meet hiring goals for specialized positions. [more...]


 

I was intrigued by an interview with the CEO of start-up M2Z that aired on CNN yesterday.

 

M2Z was petitioning the FCC to set aside wireless spectrum for them to create a “free” and “family friendly” broadband service. Essentially, they want the FCC to give them a price break on the spectrum — since they wouldn’t be able to afford to compete in a proper auction – for the public benefit.

 

You can view it here:

CNN-M2Z

 

I checked out the website and found a number of issues with their pitch…

  • It’s not really free. M2Z wants to sell wireless routers that are locked to their network and they expect these to cost $200. That’s a significant barrier to the low-income families they want to help.
  • Their ad supported model is sketchy: it will use “…local geo-tagging for highly relevant search results (i.e. searching “pizza” will give you the local pizza place down the street and not a Pizza Hut in another city or state)”. Even if you assume that they can do a better job of local results than, say, Google, why would I use their search engine rather than my current one? Are they going to lock me in somehow? Haven’t we learned that walled garden internet service doesn’t deliver a good experience?
  • “Family friendly” means they are going to be filtering out adult sites at the network level. I’m ok with that in principle, but what’s considered “family friendly” in Kansas (where evolution is a forbidden topic) is very different from what’s OK in New York. And it reinforces the walled-garden approach.

 

The idea of offering free internet service in exchange for mandatory ads isn’t new. NetZero pioneered that in the late 90′s and consumers ultimately didn’t like it.

 

M2Z draws an interesting analogy to analog tv, i.e. it’s free, and family-friendly. I might accept the argument if they were pitching this as non-profit, similar to PBS, but M2Z is a business, with VC backers that want a return on their investment.

 

The bigger flaw with that analogy is that the TV spectrum is granted to regional TV stations, rather than a single cross-country entity. A local station might go bankrupt, but the impact is minimal. M2Z wants the FCC to make a big gamble on a single company.

 

The risk is compounded because this is an unproven business model. Are people willing to buy a $200 device for unlimited wireless broadband? Maybe. But it’s far from a sure thing.

 

Furthermore, the technical nature of this service means that there are a lot of things that can go wrong for M2Z. What happens to customers who bought a $200 device if M2Z goes under? The act of creating a nationwide wireless broadband network is still far from trivial. This is not the same as PBS or CBC asking for a dedicated TV channel, where the technology is well established.

 

Consider all this risk and then remember that M2Z wants the FCC to forgo the upfront licensing fee and instead be compensated down the road with a 5% cut of revenues.

 

The FCC said no (or they agreed not to say anything, which is I think is the same thing) and some people are interpreting that as a the undue influence of Big Business. All in all, I think the FCC made the right call on this one.

 

BTW, there is an obvious comparison here with with telephony startup Ooma, which wants to sell you a $400 device for unlimited long-distance calling. In their case, the risk is being born by their backers, which is the right way to do this kind of thing.

 

BTW #2, I went to school with the newscaster Ali Velshi. I was a bit annoyed by with his language: “I have super-duper fast, you know, cable coming into my house…” I understand that he’s trying to simplify the story for a general audience, but “super-duper” doesn’t add any clarity, it just makes people feel like you are talking down to them.