Tuesday, June 24, 2008

Jaxtr, We are not dead yet!

Jaxtr raised another 10 million dollars in a second round of venture capital led by Lehman Brothers Venture Partners. It brings the company’s total raised to $20 million. I was little surprised by the funding, but digging more revealed jaxtr new business model. Finally, there is a revenue generating business model. They are venturing into the international voice calling business. With the Voice widgets for social networking proving to be a failing business model , jaxtr is doing the right thing by moving towards supporting international voice calling. Apparently, cheap international calling card company IDT IDT generates around $2 Billion in revenue. This move puts them in direct competition with jajah, mig33, mobivox to name a few.

Some of the folks like Pat, Om and Luca are not really impressed with this whole deal. I partially agree with these folks on what they have to say about the product and funding in general. I have always criticized jaxtr for their lack of solid revenue generating model. So far, they have amassed a huge user based with their free beer model. I’m not sure how much money it’s generating through jaxtr café.

So enough of bitching; For a change I wanted to highlight some of the positive things about jaxtr, and why they will comeout a winner:
• Jaxtr currently has more than 10 million users in 220 countries after about a year in business. Facebook has 70 million user and they are yet to figure out a business model. Same goes with tones of other Web 2.0 startups( twitter,ning,friendfeed etc)
• Cheap International voice Calling is a proven business model. The potential is huge and has enough dough for multiple players
• Ad based voice and SMS will be successful in future
• As the founder of Linked In, Konstantine Guericke, chief executive of Jaxtr, knows and understands the dynamics of social networking.
• The new round of funding is led by Lehman Brothers, one of the top VC, which validates their product and vision
Jaxtr café has potential to generate revenue through ads

Ok, I’m not gone talk about the downside in this article. Will save that for future. For now, I wish Konstantine and team a big success.

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1 comment:

Anonymous said...

You are missing the point here-How many folks that use calling cards have access to internet and credit cards?