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BT Leapfrogs to Web 2.0 With Ribbit

Michelle Donegan
News Analysis
Michelle Donegan
7/29/2008

BT Group plc (NYSE: BT; London: BTA) has acquired Silicon Valley-based voice platform startup Ribbit Corp. for $105 million in cash in a bid to accelerate its Telco 2.0 strategy and rival the likes of Google (Nasdaq: GOOG) in the Web 2.0 services world. (See BT Buys Ribbit.)

Speculation surfaced a few weeks ago that BT would acquire the company -- which calls itself "Silicon Valley's First Phone Company" -- to create a rival to Google's GrandCentral Communications , the integrated communications startup the search giant acquired in July 2007. (See Is BT Buying Ribbit? and Google Buys Unified Services Startup.)

Today, BT said the acquisition will accelerate its transformation to a "next-generation, platform-based, software-driven services company." The British operator puts Ribbit's platform in the same league as Google's Android and Apple Inc. (Nasdaq: AAPL)'s iPhone software development kits (SDKs).

Ribbit's platform enables software developers to add voice services to Web-based applications. The startup has thousands of developers working on new voice applications. For example, developers have integrated a voice service into salesforce.com, the online customer relationship management (CRM) service, which costs $25 per user per month. (See Ribbit Emerges.)

BT has stressed the need to focus on software-based service development for some time. Ribbit will complement BT's own Web 2.0 initiative, which is called Web21C and is part of its groundbreaking 21CN converged, all-IP network migration project. There are 9,000 registered developers for the Web21C SDK, according to a BT spokesman. (See BT Inches Toward Telco 2.0, BT Touts 21CN Progress, New Service, and BT's Learning From Google.)

BT will run Ribbit as a separate entity and won't integrate the platform into the group, says the spokesman. So, it will operate alongside BT's Web21C program. Ribbit operates on a revenue sharing model with application developers and service providers, but BT declined to comment on whether this model would change.

Ribbit, like BT's Web21C, can be used to create applications and services for enterprises as well as consumers. So far, demand has been higher for enterprise services, says the BT spokesman.

The buzz about Web 2.0 is big at the moment. BT's project to change into a software-driven services company is evaluated in the recent Heavy Reading report, "The Ultimate Mashup: Web 2.0 & Next-Gen Telecom Application Servers." (See Why Telcos Need Web 2.0, Web 2.0 Debrief, TV & Storage Play Web 2.0, Web 2.0 Expo Photos, Part I, and Web 2.0 Expo Photos, Part II.)

— Michelle Donegan, European Editor, Light Reading

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