I have been asked by readers and investment community executives over recent weeks about both Packet 8 and Xten. While I have opinions about both, I started to do some digging for what makes the two publicly traded companies different. When I found this post on ZDNet some things started to appear clearer.
Obviously this win for XTEN is a huge endorsement for their technology, not to mention they added a customer in Yahoo which has massive credibility. Last month at the VON in San Jose AT&T was seen demoing an XTEN Softphone connected to CallVantage. But let's all think what's in it for Yahoo. They already have a very tight and cozy relationship with BT in the UK. Here in the USA they are already working with SBC. The lack of a formal "announcement" means Yahoo is not yet ready to move. Just like SBC has a deal that was only referenced in a filing with Delta Three about their agreement, but the San Antonio Baby Bell stayed mum on, some connecting the dots could possibly mean where there's smoke, there's fire between Yahoo and XTEN and possibly even CallVantage. Remember, not everything that is announced happens right away, and for some companies, not saying something at all is as much an indicator as others saying a lot.
While this is all speculation, I've also been hearing all kinds of rumors that Yahoo is seriously looking at getting into VoIP in a big way. Unlike Google which has been the subject of similar speculation, Yahoo's already a proven player in Japan and the UK with VoIP oriented deployments. Since AOL is already in, and making some noise about a softphone in the future, and where Yahoo has already demonstrated a commitment in that direction via Messenger with BT, layering in XTEN's Eyebeam and then backing it up with SBC/AT&T's CallVantage is a triple win for all the players. SBC extends their DSL oriented broadband with VoIP while Yahoo uses their online marketing might to attract customers to the combined Yahoo, CallVantage and XTEN offering. Unlike AOL, I don't Yahoo would come out with a Telephone Adapter which in many ways in more analog culture, when software and on screen is core to their whole experience.
Considering that each party already has the best of breed offering and that they can all easily be considered a category leader in their sector, this looks even more to make sense.
- XTEN for their softphone. It's award winning, based on SIP and has a proven track record with customers and users. Vonage, SIPPhone and others all use it.
- AT&T for CallVantage has the best VoIP product out there in the consumer market.
- Yahoo is the best at building an online brand and consistently delivers services which they get paid for.
Given their recent success I would say that Yahoo in the VoIP business with these two partners could be something for investors to really scream "yahoo" about once it gets launched.
Based on some emails I received this morning, I did some more digging around.
While the details about Yahoo are limited, and the XTEN folks have been mum on the subject, a further review of their most recent 10-Q clearly shows the customer win, along with one from Belkin.
For those challenged by EDGAR when it comes to looking for details like these here's the actual text.
The significant increase in software sales revenue consisted of fees paid to us by numerous small and medium sized IP telephony service providers. However, the following customers purchased unlimited licenses to our software and represent material customers: Belkin Corporation and Yahoo!. Under the terms of our agreements, neither Belkin nor Yahoo! are required to display any Xten trademarks due to the fact that they purchased a private label version of our software.
