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JAJAH TARGETS USERS OF SKYPE

By
Brian Garrity
Published Nov. 27, 2007, 10:00 a.m. ET

Consumers who want to make cheap international calls over the Internet no longer need to use a computer or special phones to make them.

JaJah Inc., a Mountain View, Calif.-based start-up backed by Intel, Sequoia Capital and Globespan Capital, is pushing a new technology that allows users to make Internet calls outside the US with any landline or mobile phone.

The service, one of a handful of rivals to eBay’s Skype online calling business, requires users to register their phone number with JaJah online and enter the numbers of the people they want to call internationally.

The company then assigns each international contact a local US number. Calls to the local numbers dial into one of JahJah’s US-based switching stations that then route the calls outside the country using the Internet.

JaJah calls typically cost 3 cents to 5 cents per minute, compared to international rates of 50 cents to $1.50 per minute offered by traditional cellphone operators and long-distance companies like Sprint, AT&T and Verizon.

Jajah co-founder Roman Scharf said that the primary appeal of the service is that it allows consumers to make cheap calls via the Web using their own phones.

Other voice-over-Internet services like Skype, Google Talk and Vonage require users to make calls using their computer and headset; or they have to buy a new special phone that can handle Internet calls.

Jajah currently claims a user base of more than 4 million customers in a little over a year of operation.

That audience pales in comparison to Skype, which has over 200 million users worldwide.

However the company and its backers are banking that JaJah’s simplified approach can help it eat into Skype’s market share.

Scharf told Reuters earlier this month that the company hopes to go public in the second or third quarter next year with hopes of pushing its user base to as much as 80 million users.