Communications company British Telecom (BT) has acquired innovative web telephony platform Ribbit for a reported $105 million. BT has been sniffing around the Bay Area for startups to acquire for some time and this one is a great fit. Not just because both companies are in the voice market but because as a means of folding click-to-call functionality into any web application – Ribbit is fascinating.
BT was supposed to be a big mover and shaker in the communications industry of the future. Telephony expert Om Malik has been watching the company’s progress closely though, and says that it has largely failed to live up to its promise. Can Ribbit move the needle for BT? We think it could in a big way.
Who Cares?
We argue that well built developer platforms are the key to the future of every industry. The internet has blown wide open the means of production in content and is now aimed at the scarcity of functionality next. Even with giant research and development budgets, established companies are increasingly hard pressed to compete with the innovation brought to market by a whole world of developers once those developers are handed Application Programming Interfaces (APIs).
The big companies can offer mass distribution, financial and tech security – but they sure aren’t the only game in town any more. Smart telecom companies know their time as local monopolists is counting down fast. Companies like Ribbit and others powered by Ribbit could quickly offer better, cheaper, more exciting telephone service than companies like BT. Someone had to buy Ribbit and it’s a sign of the ineptitude of US telecom companies that none of them did.
What’s Ribbit All About?
When we first heard about Ribbit, we thought it sounded like a whole lot of hype that wouldn’t amount to much. How exciting is voice communication anymore? After hearing about a number of use cases, though, we became much more interested in the company.
Ribbit is a platform that lets developers add click-to-call functionality to other applications on the web. It’s really easy to set up a way for users to make a voice call over the internet to a particular phone number. See, for example, the shot below of Ribbit functionality being added to a widget in drag-and-drop widget authoring service SproutBuilder.
The other use case that interests us is a short list of Adobe AIR applications powered by Ribbit. Though the AIR iPhone may be more frivolous than anything else, as a proof of concept it’s powerful. Ribbit’s own consumer app Amphibian is more significant.
Andrew Powell’s mashup of Mapquest, Kayak hotel look-up and Ribbit to call found hotels is also pretty cool. The 5,000 developers already signed up for access to Ribbit will also be offered a list of new features as of today, so even more innovation should be delivered in short order.
The point is that Ribbit is a platform that that offers to move voice calls off of the handset and outside the relatively slow-moving development environment of Skype. There are a world of interface and functionality possibilities that could be set on top of Ribbit.
Michael Boustridge, President, BT Americas said in the release about the deal: “The Ribbit platform makes it simpler, cheaper and faster to build communications functionality into applications, enabling developers to introduce new revenue-generating voice services in hours, rather than weeks. By combining the Ribbit platform with BT’s existing web services, we have the potential to deliver some of the world’s finest applications for communications innovation benefiting consumers and businesses alike.”
Will Acquisition Propel Ribbit Forward?
Will developers engage, though? As Om Malik again pointed out today, Ribbit to date has stirred up limited developer interest. We suspect however that two factors will contribute to a significant increase in interest.
First, being owned by a very large company (operating in 150 countries after 27 years) could lend some real stability and visibility to Ribbit. Second, being owned by a European company, where there’s a stronger history of innovation in telephony and higher expectations, could help propel development better than the climate in Silicon Valley has. There is relatively little innovation in telephony in the US, in case you haven’t noticed. The iPhone platform could help change that but it’s only beginning.
We’re excited to see what BT can do with Ribbit. We’re thrilled to see a consumer infrastructure play, based on APIs, focused on an unexpected technology (a telephony API instead of say, an ecommerce API) rock out to the tune of $100 million plus. That’s great news for innovators in general.
Will BT strangle Ribbit? Telecom companies generally aren’t a breath of fresh air into any polite conversation, but to a great degree this situation isn’t unlike every other acquisition by a major player of a small one. As a development platform, however, Ribbit seems particularly well oriented to maintain some integrity in a larger company. We’ll have to watch and see.
Someone had to buy Ribbit, though, and we expect to see developer platforms rolled out by all telecom companies around the world within the next two years. In many cases it will cost a lot more than $100 million, too.
