Friday, November 9, 2007

Jajah's 2007 IPO cancelled

VoIP callback service provider Jajah has cancelled their IPO for 2007, an idea they first communicated to my fellow Berlin journalist Thomas Ramge in his interview for the German economy feature magazine Brand Eins. When they met in December 2006, Jajah's co-founder Roman Scharf told Ramge that the company would go public at the end of 2007. The year is nearly over and Scharf now had to correct the story a tiny bit in an interview he had on wednesday with Reuters on wednesday, November 7 2007, postponing the IPO for nearly a year.
NEW YORK, Nov 7 (Reuters) - Internet-based phone company Jajah Inc aims to go public in the second or third quarter next year to expand its low-cost calling service globally, co-founder Roman Scharf said in an interview on Wednesday.
Too bad that the Reuters reporter Ritsuko Ando is no frequent reader of Brand Eins or GigaOM and missed a much more juicy story, which Om Malik puts in the right words for us:
Jajah’s Hypothetical IPO Delayed Another Year

Jajah, the VoIP callback service provider that shifted from paid to “free” and was dreaming of an initial public offering in 2007, has pushed back its IPO plans until the second or third quarter of 2008, co-founder Roman Scharf told Reuters. The timing seems about right — the way everyone is going nuts here in the Valley, profitless IPOs could make a solid return by the middle of next year.
Scharf says that they would need $100 million to $200 million to bring Jajah within a year to a level of 50 to 80 million customers. That would be the purpose of a possible IPO. "We want to do this next year. We believe the second or third quarter next year might have the right environment for us to go public."

These numbers are very humble, compared to the evaluation of 2.9 billion dollars which RRS Capital Strategies Services from Vienna credited them as "fair value" in May 2007 after the investments by Deutsche Telekom and Intel. They deducted this virtual price from Jajah's user data and the conditions under which Skype had been sold to Ebay in 2005. As we know Skype's value has fallen by $1.43 billion and this is also affects the valuation of other internet phone companies.

Until now only stock holders of Jajah's investor Qino Flagship could have fun with the company. Qino Flagship is publicly listed and the only stock trading possibility to participate in Jajah's success. Since June Qino's value has fallen from €15 to €10.

But still the carpetbaggers are sucking up every Jajah news, no matter how goofy it is. In the web forum of the Austrian magazine Börse Express they try to construe even the slightest Jajah move. Obviously they are happy about the new business model: in-call advertising as an opt-in solution. Users listen to an audio ad before every phone call and receive Jajah minutes in exchange. 50 per cent of the advertising revenue gets the user and the rest shares Jajah with the phone company, explained the other Jajah founder, Daniel Mattes, in an interview with the German newspaper Frankfurter Allgemeine Zeitung.

"JAJAH's patent pending in-call advertising platform turns the inventory of the world's telephone calls into an advertising market place", said Mattes in the German press release. "Google paved the way around a decade ago with Google AdWords. Their approach was revolutionary, as they respected the users' common sense and reactions. We are now trying to do the same for the massive amount of phone call inventory. Think AdWords for the phone", he says in English.

Comparing oneself to Google is always a great way to get publicity. Does anybody remember when it was cool to sell a company as "future Microsoft"? Although Jajah has filed a patent application they are not the first with such an idea. The Rebtel clone Talkster also plays 10 second ads before every call. And Californian Pudding Media even wants to eavesdrop conversations to deliver targeted advertising during their free phone calls.

1 comment:

  1. What I cannot understand is how profitless company can go IPO ? For two years they did not even worked out a decent plan for returning of their investments. Their IPO will fail once happen.


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