Can AOL Become Carrier 2.0 By Executing on Voice 2.0 Manifesto?

AOL has a long history of innovation. Initially launched as a proprietary pre-Internet personal communications platform building up to several million users via dialup connections, AOL has evolved its integration into the Internet to the point where it recently broke down its “closed garden” business model and opened up the majority of its content and services to anyone visiting their site. It has certainly gone down a bumpy road with its history of balancing the conflicting needs of innovation against the needs of an operation bureaucracy looking for a profitable business model. At one point it was the poster child for the Bubble 1.0 bust as the business world tried to work out business models to provide a profitable combination of both infrastructure services and (syndicated) content. Breaking down the walled garden is but one example of the direction it is going under new leadership.

Last week there were several posts (Aswath, GigaOm) about the closure of AOL’s TotalTalk, where AOL effectively recognized there is little to gain by playing in the pure legacy telephone replacement game and has decided to abandon it. Earlier this week there were several posts (Jon Arnold, Andy Abramson, Mark Evans) discussing Vonage’s latest quarterly results; the common theme is that Vonage is spending such enormous sums on customer recruitment that there is little hope of profitability in the foreseeable future. Cablecos and legacy telcos offering DSL services have a leg up as they already have a customer base to whom they can market. But Andy at VoIP Watch sums it up best when talking about the demise of AOL Total Talk in his Requiem for the Future of VoIP:

Rather than look at it as a failure, my take on this is AOL really has seen the future sooner than others. Much like the BT announcement earlier this week about their softclient, and like their other online portal player competitors including Yahoo, Google and MSN, AOL’s Voice Team has seen the future of telephony and is moving in that direction with AIM PhoneLine, and the burgeoning ecosystem that already has started to bubble earlier this month at the VoIP Developer’s Conference, and will likely have a big boost at VON in Boston next month.

But unlike Yahoo and MSN who have so many internal battles to fight, AOL as part of Time Warner has leadership that is smart enough to not fight a marketer (Time Warner Cable) who wants to sell a phone 1.0 replacement, and instead is focusing on Phone 2.0 and where it can be.

Today AOL issued a press release outlining their execution on the Voice 2.0 Manifesto through building an ecosystem around their AIM Triton IM client and its AIM PhoneLine service called the Open AIM PhoneLine initiative. AOL will introduce three API’s this fall that will give developers and hardware partners the ability to:

  • Personalize the AIM Phoneline service by adding ringback tones and unique ring tones for frequent callers.
  • Enable a wide variety of USB devices such as speakerphones and phone adapters that will allow standard cordless phones to initiate and receive calls with the AIM Phoneline service.
  • Build new call management functionality into the AIM Phoneline service such as context and relevance-based call handling that could treat each call on the basis of rules that use Caller ID, online presence, calendar activities and more.

AIM PhoneLine provides free inbound numbers and, for a $9.95 per month charge, provides calling out both within North America and internationally on their Unlimited Plan. This is all tied into AIM’s Triton client to provide presence and chat functionality. Using the Open AIM PhoneLine API’s, AOL will be providing demonstrations next week of:

  • MyNuMo, an online content community demonstrating ringtones that allow personalization by caller, and
  • MVox Technologies, demonstrating their versatile speakerphone technology linked into AIM PhoneLine
  • Iotum’s Voice 2.0 call management service using the iotum Relevance Engine

By combining the AOL PhoneLine API’s with iotum’s Relevance Engine, inbound AOL PhoneLine calls can be directed to voice mail or AIM’s Triton client or, if the user has the Unlimited Plan, to the user’s wireless phone. Potential applications include using the service as a second line to home-based businesses to triage incoming calls such that the existing customer base gets priority attention.

This is a break through for iotum in that

  1. it becomes their first platform that makes their Relevance Engine available to a broad consumer audience, namely, AIM’s 43 million registered users.
  2. they can focus on their core expertise and incorporate it into AOL’s platform that manages the infrastructure issues such as providing phone numbers, call termination and switching.
  3. For iotum, it is the first agreement where users can simply extend their current setup to incorporate and experience their Relevance Engine. There is no need to purchase additional equipment, subscribe to an additional service and/or write interfacing software (such as with their PhoneGnome or Asterisk implementations).
  4. AOL will promote its partners’ applications and devices at an on online store that users can access by simply clicking the “Shop” link off of the AIM Phoneline dashboard.

In an interview with Alec Saunders, iotum’s CEO and author of the Voice 2.0 Manifesto, he made the following points:

  • AOL wants to create a community of innovation by opening up appropriate API’s to developers. For instance, opening up API”s to PhoneLine’s switching infrastructure allows iotum to handle call transfers. This is a feature that Skype has said will only be available in Q1 of 2007.
  • Development of call transfer functionality requires not simply creation of an appropriate API but iterative co-operation between the platform vendor (AOL in this case) and the technology team at the partner (iotum) to develop an API specification such that the logistics of call transfer functionality operate in a user friendly manner while meeting the general business process rules for handling call transfer.. In this case iotum worked over the past few months with an AOL developer team in Halifax, Nova Scotia to come up with the relevant API. How this happened will be the subject of a separate post.
  • The demonstrations at Fall VON next week are the launch of a startup phase with the final service becoming available by year end.
  • While details of a launch marketing plan still need to be worked out, users will be able to subscribe to the service via AOL’s store front; the business model involves revenue sharing with AOL as the conduit responsible for recruiting customers..
  • The AOL PhoneLine team has been “a superb partner to work with; they have been responsive; they provide promotional opportunities and they’ve delivered”.

At Fall VON next week I will be looking for examples of execution on the Voice 2.0 Manifesto as it provides the route to sustainable and growing profitability for Telco 2.0. The demonstration of iotum running on AOL Phone Line is certainly one stop I will be making and reporting on.

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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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