If Nimbuzz is planning to play with social networking and all the buzz words, it might be a bit late in the day. The market is looking for a monetization story, not a mobile VoIP app that hooks into every IM-client / social network / handset on earth. What is the value in that? There are plenty in the mobile VoIP market already signing up customers without much revenue to show. The only time they generate revenue is when a call is terminated outside the community cloud i.e. into landlines and mobile phones that are not Nimbuzzed.
An IM or a voice chat between Nimbuzz-to-Nimbuzz is not going to generate money. It will remain a challenge to monetize that aspect – I mean for ever! So something is wrong here: You create a community but make money only when you communicate outside that community!!! What incentive is there is expand that community then?!!!
For off-Nimbuzz calls, the company will make money on international calls mainly. Like EQO and iSkoot, Nimbuzz will also re-direct the calls to its local VoIP PoP from where it transports the call over public Internet backbone. So for the amount of time you are on an international call, you are effectively making and paying for a local call in addition. That is like the early PC-to-Phone days when you had dial-up connections. Outside the US, where local calls were metered, you paid for a local call (to your telco) plus the international call rate charged by Net2phone and others. That was not the main factor responsible for slow uptake of PC-to-Phone, but it was a turn off nonetheless.
Dial-up market threw another challenge in the US, if you may recall: Switch Congestion. If bridged or hybrid mobile VoIP services like the one offered by Nimbuzz gains significant traction, you are going to face some unhappy cell operators because you will keep their GSM switches engaged for nothing. This could particularly be the case for operators offering unlimited local/national calling plans. So now you are compelled to work with the cell operators. And if you have any luck signing them up, your razor thin margins tend to almost zero.
The paying user base of Skype is under 3% of its registered base. If that is an indicator, companies like Nimbuzz would need to sign up tens of millions of users. And once they do that, there will still be a lot of worrying about the margins that only keep evaporating.
Nimbuzz and EQO and iSkoot etc will at some point turn to advertising of course. It might be a better idea to explore that now rather than treat that as your last resort.
Comments (1)
I c lots of startups coming into these "new" markets and as such not all are going 2 get traction.
Some are self-funded and some angel/VC backing and someone throwing $ at the problem and some will stick.
the rest will fall by the wayside; just the way it is.
Most SN type players will not be around after a year
Lal
Posted by brendan lally | May 21, 2008 5:57 PM
Posted on May 21, 2008 17:57