Internet voice provider Jajah on Tuesday inked a deal with Yahoo to become the phone service for Yahoo Messenger, the search comany's popular instant-messaging.
The deal is a coup for Jajah, which has 10 million customers, because it gives the Mountain View, California-based VoIP company access to Messenger’s nearly 97 million users.
Jajah’s service will replace Yahoo’s current VoIP application, which provides basic and premium PC-to-PC, PC-to-phone, and phone-to-PC communications in Yahoo Messenger.
“This is a great deal for Jajah for obvious reasons, but it is also a very good deal for Yahoo,” said Sameer Mithal, senior principal at IBB Consulting. “It relieves Yahoo of the burden of keeping up with changes in the VoIP industry, a tough market in which it was not designed to play.”
The global VoIP industry involves frequent disruptive changes, thin margins, and complex arbitrage deals among hundreds of globally dispersed carriers or third-parties that resell phone minutes.
“Many companies have made voice part of their user experience, but customers are dissatisfied with the voice quality and business owners are not satisfied with the numbers,” said Roman Scharf, president of Jajah.
By replacing their in-house VoIP services with Jajah’s, he said, companies such as Internet portals, cable operators, and even mobile carriers can fix both their voice quality and profitability problems.
“We deal directly with phone companies instead of third parties, which maximizes voice quality and margins and minimizes fraud,” Mr. Scharf said.
The Yahoo-Jajah deal matches two companies with similar phone strategies in the very combative voice world. Unlike Skype and Vonage, Jajah has taken a partnership approach with carriers. Deutsche Telekom is a major investor in Jajah.
And unlike Google, which has challenged mobile carriers to open their voice networks, Yahoo has forged long-term relationships with more than two dozen carriers, including Deutsche Telekom, Jajah’s main backer.
“We chose a telecom partner as an investor because we knew we needed telecom insiders to build what we currently have,” Mr. Scharf said.