Stellar Start-Ups: Free speech on the phone?

Advertisers pay for content with ads on the PokeTalk site, while consumers get free calls.

Cellphone 224.88 (photo credit: Bloomberg [file])
Cellphone 224.88
(photo credit: Bloomberg [file])
If you can watch content for free on TV, and listen to content for free on the radio, why can't you talk content for free on the phone? For some reason, we were raised to believe that phone calls were "expensive," because of those monthly bills we get from the phone company, but that TV shows and music were "cheap," because we got them for free. Of course, actors and singers don't work for nothing; TV and radio exist because they sell advertising to offset the costs, enabling us consumers to get the content we want to see and hear for free. With the evolution of "open" phone systems - specifically VoIP, which has allowed any enterprising entrepreneur to get into the business of selling phone calls, hi-tech entrepreneurs have used a plethora of approaches to deliver cheaper IP-based phone services to customers. There's the basic PC-to-PC communication system, the most prominent of which is, of course, Skype. There are the SIP-based systems, such as Vonage, that promise to bring the flexibility and economy of IP connections to your home phone. Besides these two "brand names," there are dozens of other smaller players operating in both fields. In other words, IP telephony is clearly a growth industry. But both have their drawbacks, both for the consumer and the industry. Skype is free if you're using it to talk to others on-line; if you want to call "regular" phones, it'll cost you. Most "traditional" (PSTN) phone companies are not particularly enamored of Skype, because the service has cut into their business; if you can call people for cheap or free, why pick up your phone company to make a call? And as far as SIP calls are concerned, it would be sufficient to browse the forums for some of the companies that list the seemingly endless complaints on poor sound quality, dropped calls, etc. Then there's PokeTalk ( Now, in this day of expanding IP phone services, it would be easy to take PokeTalk for another "voice in the crowd." So what's different about PokeTalk? It's the company's revolutionary business model - managing the "content" of phone conversations for consumers the way the music and video people manage their content. Instead of charging people for talking on the phone, says PokeTalk's Shai Genish, the company lets advertisers pay for the content with ads on the PokeTalk Web site - with consumers getting to make free phone calls - to real phones! While Skype and all the other Web-based "phone" services allow users to call other members of the service for free on-line, few allow users to make calls to "regular" phone numbers for free. But that's exactly what PokeTalk does; users log onto the site and type in the phone number they want to reach. PokeTalk can connect calls to 55 countries around the world, as well as make local calls. And all calls made from the PokeTalk site are absolutely free, meaning that users could theoretically never have to pay another phone bill! At its basic level, PokeTalk allows users to speak for 10 minutes, 50 times a month. "That's eight hours of total talk-time, an amount that should be sufficient for most people," says Genish. But users can increase their allocated time by helping spread the word; for each person they sign up for the service, users can increase the amount of time in their account. "One woman from Belgium signed up about 1,500 people in the past couple of months," Genish says, adding that the viral word-of-mouth marketing effort has been very effective: PokeTalk now has more than 100,000 subscribers, after opening up the service to the public late last year. About half of the service's users are in Israel, but word is spreading fast abroad as well. Consumers aren't the only ones excited over PokeTalk, especially because it saves them so much on long-distance phone calls; professionals and industry folk are enamored of it as well, and PokeTalk won two awards last year for being one of the best and most innovative VoIP services to come along recently. Despite those awards, another unique aspect of PokeTalk is the service's use of PSTN lines for local phone calls. "We do use VoIP switching systems to complete international calls, like many phone companies do, but our local calls are made on regular telephone-company equipment, not VoIP lines," Genish says. As a result, he says, traditional phone companies look at PokeTalk as a friend, not the enemy they see in other VoIP players. "After all, we're bringing them business, since we are paying for the calls placed on their lines," Genish says, with the costs being offset by the advertising. Supporting free phone calls via ad money might be a good way to establish a base, building up a cadre of loyal users during start-up mode - but is it any way to run a mature business? Absolutely, says Genish. "The ads on the site are extremely low-key and unobtrusive, and there's no doubt we could make much more money by being more aggressive and taking advantage of all the marketing tools at our disposal to increase ad revenue. But we're not interested in doing that right now," he says, adding that the company would rather concentrate on building up its user base right now. And that base could be very big indeed, says Genish. "We're planning to expand to even more countries, eventually covering cellphones as well as land lines [currently, you can make calls to cellphones in only a limited number of countries]," he says. "And we are planning to add many useful features, such as conference and meeting calls, and we may end up charging for some of our services." But PokeTalk plans to keep the advertising-revenue model intact, ensuring that the prices they charge will be the cheapest anywhere. "There are some expenses we won't be able to avoid, but with help from the advertisers, we are going to make sure that the services we offer are the cheapest around," Genish adds - meaning that the smart (ad) money is on PokeTalk's achieving its goal of becoming the "media company" for voice services!