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Dec 31

2009 in Review

As 2009 draws to a close one cannot help but reflect upon the year that was, and what the year ahead, with all its promise, will bring.

While the economy and its recovery, real or imagined, played a large part of 2009, the mainstream introduction of HD Voice in 2009 had VoIP finally showing what it was capable of, rather than what it could emulate. During the year there were also significant acquisitions in the voice over IP space worth mentioning: 

  • In April Acme Packet announced that it was buying Covergence, in a deal estimated at $22.8 million to help round out their product line with Covergence's software-based session border controllers for large enterprises.

  • In June, we saw HotMail co-founder Sabeer Bhatia's and Yogesh Patel's SabSe Technologies acquire Jaxtr, for an undisclosed sum, undoubtedly for its consumer service that provides free and low-rate international calling to over ten million members around the world.  The same month we saw Natural Convergence buy NewStep Networks, a provider of seamless session management solutions.

  • In July, after navigating Verizon's attempt to block its bid, Avaya successfully acquired the Nortel's Enterprise Solutions division for $915 million, after clearing government regulators.

  • In September, eBay announced that it was selling its Skype unit to an investor group that included Marc Andreessen's new venture, Andreessen Horowitz.  Under the deal, eBay received approximately $1.9 billion in cash and a note from the buyer in the principal amount of $125 million, for a total of $2.025 billion.

  • In October, Cisco System acquired Tandberg, the video conferencing equipment manufacturer, for $3.4 billion, to acquire additional video technology for their UC and enterprise products.

  • We saw a major endorsement for VoIP and the SIP protocol in November when Google purchased Gizmo5 for $30 million, after rumors that Skype were put to rest that it was considering acquiring Gizmo5, as replacement technology to combat the JoltID issue with the founders of Skype.

  • In December, Telefónica, the parent company of O2, announced the acquisition of Jajah for $207 million, in an all-cash transaction – not a bad return for a company that raised $35 million from various investors including Deutsche Telekom, Intel Capital and Sequoia Capital over the last four years. With over 25 million subscribers, Jajah provided low-cost termination services via the web, mobile telephone and Microsoft Outlook, in a similar fashion to IVR Technologies' End User Web Interface, mobile smartphone applications, and its Microsoft Outlook Add-in.

  • And finally, just as 2009 was drawing to a close, on December 30th we saw SpinVox and its voice to text technology being acquired by Nuance Communications for $102.5 million, ending many weeks of speculation on the fate of this troubled startup as it struggled to repay a $48.8 million loan.

It was certainly a banner year for VoIP acquisitions and consolidations and none more dramatic than eBay's spinoff of Skype, the potential acquisition by Index Ventures and Mike Volpi, and the associated lawsuit by Skype's founders Niklas Zennström and Janus Friis over the JoltId software.  As we bid adieu to 2009 we have AT&T asking the Federal Communications Commission to create an orderly timetable for a shutdown of the analog phone system in the United States, so we can only imagine the excitement, opportunity and possibilities that the year ahead will bring.