A wake up call from ABI Research to Yahoo & Microsoft, Vonage and others

The big IM companies may be waiting for the VoIP market to shake out before eyeing the survivors, or they may just have other priorities.

Oyster Bay, NY - December 9, 2004 - Unexpected as it might seem, there is a lot of logic in a large instant messaging (IM) company buying a VoIP business, says Vamsi Sistla, director of broadband and residential entertainment technologies at ABI Research.

"Millions of people use the big IM services" he says. "Some use their voice capabilities. But the experience is pretty horrible. You have to sit at a computer, use a microphone and speak loudly. And it goes over the public Internet, so quality is poor and security is suspect."

"Why aren't they doing anything about it? They have an established presence: why don't they buy out a Vonage, an Avaya or a Voiceglo, integrate their technology and start offering packages to existing and new subscribers? Isn't that a huge revenue opportunity for them?"

The big IM companies may be waiting for the VoIP market to shake out before eyeing the survivors, or they may just have other priorities. "I'm not saying that Vonage or any of the others are ready for sale," Sistla adds, "but there would be definite benefits to such an acquisition."

Those benefits would flow both ways: the larger IM company would gain instant entry to a hot new market with tremendous growth potential, and the VoIP provider - - they are nearly all quite small companies - - would enjoy vastly increased resources, credibility, and a huge existing customer base.

With such a merger, at the least these emerging VoIP providers would be able to compete more effectively against the cable MSOs who are hungrily looking at VoIP revenue.

And consumers would benefit from the ability to integrate their computer -based voice messaging with their land -line phones.

ABI Research's study "Residential VoIP Markets: Cable, DSL, WiMAX, Hosted IP Telephony Subscribers and CPE" lays out the drivers, barriers, and opportunities in the broadband VoIP market. Forecasts include subscribers, subscriber revenue, CPE shipments, and CPE revenue.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. For more information please visit www.abiresearch.com, or call 516.624.2500.

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