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Jaxtr now has a buck for every one of its users. The company has raised $10 million in a second round of financing to expand its cheap overseas internet calling business.

The Menlo Park, Calif.-based company uses a voice-over-internet-protocol service to knock the costs out of overseas calls. It can charge as little as 1 cent a minute for calls to China because of its unique system. It lets users advertise to an online community how they can be contacted via a widget they place on a blog or a social networking page.

A user puts the widget on a page, and a would-be caller clicks on the widget. The caller then enters his or her phone number on the widget and then clicks the “call me” button. Jaxtr figures out the location of the caller. Then it finds a local phone number to call the caller back. It gets the caller on the line and then proceeds to make a call to the user. No one realizes it’s actually a three-way connection. The caller is connected via a local phone call, the call itself is routed over the Internet to Jaxtr’s servers, and then the servers complete the call through a local call to the user who is being callled. The call goes through as a local call for a fraction of the cost of an overseas call. Every time the caller and user want to make a call across the same country lines, they use that same local phone number.

Konstantine Guericke, chief executive of Jaxtr, was also a cofounder of LinkedIn, the social networking company that recently raised $53 million at a $1 billion valuation. While his company isn’t that valuable yet, Guericke said he’s excited at the opportunity because overseas calling is a $60 billion business.

“I like to do new things, and I see the same kind of change happening here as when LinkedIn started four years ago,” he said.

We’ve noted how fast Jaxtr is growing in past stories. In contrast to Skype (which is projected to hit $500 million in revenues about five years after its launch), most of Jaxtr’s calls are phone-to-phone rather than PC-to-PC. Read the rest of this entry »

Updated

Jaxtr, a Silicon Valley company that offers Internet calling, is crowing about its growth rate. Five million people have used the service since it launched, up from half a million users in July, it says.

To be clear, this is not the same as its monthly active users, which the company didn’t disclose. So many users who experimented with the service once may be counted in its number, but may no longer be using the service.

Indeed, Jaxtr’s fiercest competitors, Jajah and Jangl, report growth too, but are vague with specifics.

Menlo Park, Calif.-based Jaxtr says its growth is evidence that it has a superior interface that helps drive adoption.

With Jaxtr, you sign up and get a URL link, then you send that link to a friend. They click on the link and enter their phone number. Then, their phone rings, your number rings, and the call connects. Jaxtr provides a local telephone number, so you can make calls overseas while paying domestic rates. You can also link all of your accounts to one number.

However, its competitors’ interfaces are — at least to us — also relatively easy to use.

To be frank, VoIP calling services still aren’t as intuitive as normal landline or mobile phone services, at least for most people. Mass distribution has not been easy for any of these startups.

The place where VoIP really stands out is when it is built into a more comprehensive suite of office communication services so you can easily record messages and store them with your email. Or, it can be used as a cheaper way to make international calls if you have friends and family overseas.

Jaxtr, Jajah and Jangl all offer widgets on social networks and other sites, in an effort to get the average Myspace or Hi5 user calling their friends on it. Jangl has cut business deals to make money: It provides anonymous calling services to dating sites like Match.com and the FriendFinder.com empire.

UPDATE: The company also says 45 percent of its users logged in to its site in the past 30 days — mostly to check voicemail. It also says most people make calls without going to the site, either through a widget or through their phone.

Jajah and Jangl may have sensed a shakeout among VoIP startups. They recently announced a strategic partnership, where Jajah will continue work in its calling infrastructure and Jangl will focus on building social web applications.

Still, Jaxtr claims to be growing so fast that it is facing scaling issues, necessitating more engineers. It recently poached Taneli Otala from MySQL, to be company’s new vice president of engineering.

Meanwhile, the other companies keep coming out with more features. Jangl now has an SMS service, for example.

Here’s a short video on how Jaxtr works.

Online telephone services Jajah and Jangl have joined forces to overcome the large odds against them in the cut-throat, low-cost world of telephone calls.

Under their accord, the two sides will exploit Jajah’s wider infrastructure and Jangl’s growing user base on Web sites. The deal heralds a consolidation in the busy Internet telephone industry — which is filled with wannabe start-ups.

Jangl and Jajah have been scrappier than most. Jangl offers a white-label calling service on dating sites and provides calling widgets people can embed on their social network profile pages. You enter your phone number on a Jangl site or widget, then you get a disposable phone number that you can pass out to friends — or dates — without revealing your real number. You can make calls across landline and mobile devices; you can make international calls at local rates.

Jajah offers similar services, although it has not cut as many deals with other sites.

The idea behind this strategic partnership is to build on Jajah’s technical expertise in Internet telephony, extending that infrastructure worldwide. Jangl will use this infrastructure, in some cases, to provide calling services to its larger distribution across Web sites.

The two companies will run advertising across many of their web properties and split the revenue, using the advertising system Jajah recently launched. They will keep the names of their existing products.

We talked with Michael Cerda, chief executive of Jangl and Roman Scharf, cofounder of Jajah, who explained the rationale behind the deal.

The market is “seemingly crowded,” Cerda told us, “and people — the press, venture folks and end users — are confused” about how the services are different from each other.

Jajah, Jangl and a third competitor, Jaxter, have been lumped together as companies that have received funding from VCs but don’t have clear ways to become big businesses or pull ahead — “bubble” companies, as USA Today wrote in this article.

This strategic partnership is “going to surprise people, it cuts off some companies at the knees — you know who I’m talking about,” Cerda told us, obviously referring to Jaxtr.

“Some [VoIP] companies don’t have anything specific. There are a lot of weak concepts and strategies,” Scharf said. Jajah has telephony infrastructure in 55 countries, which it claims makes it the most widespread telephony system. There are VoIP competitors. Skype is one, and it has many more users. Jangl and Jajah say their services are easier to use than Skype because they don’t require users to download software or buy a special headset in order to make calls.

Both companies are mulling new opportunities on web and mobile. Jajah will launch an application programming interface (API) so other developers can build Jajah’s calling services into their applications. Jajah and Jangl will also develop calling applications to run on social networks that use Open Social, the Google-led initiative to allow applications to work on multiple social networks.

The companies are looking at ways of doing revenue-sharing deals with third-party developers.

Jangl has raised $9 million from Storm Ventures, Labrador Ventures and Cardinal Venture Capital.

Jajah, is backed by Sequoia Capital, and recently raised $20 million in a third round led by Intel Capital.

Here’s the latest action:
–Jajah gets shut out of eBay
–German cell-phone software vendor buys iPhone game maker
–Verizon secretly pressuring FCC Chairman to renege on wireless opening?
–Facebook advertisers are “selling shovels to other miners”
–Ballmer: Ads to make up quarter of Microsoft business
–Research firm Gartner predicts continuing chip-industry slowdown
–Google’s DoubleClick acquisition may face still more hurdles

Jajah gets shut out of eBay — This was pretty predictable. As reported earlier, Jajah released a button aimed to give small businesses the equivalent of a free 1-800 number. eBay vendors could use it to let customers call them for free from their eBay page. However, eBay owns Skype, a competing service to Jajah, and quickly stripped Jajah’s buttons from the site within 24 hours.

German cell-phone software vendor buys iPhone game maker — The German company, Shape Services, has bought New York-based iPhone Applications List, showing how the iPhone has generated a platform of its own that’s creating quite a bit of excitement, and could eventually rival the iPod ecosystem. There’s an estimated $1 billion in sales annually of iPod add-ons, according to Dow Jones.

Verizon secretly pressuring FCC Chairman to renege on wireless opening? — News reports suggest Verizon is lobbying behind the scenes, perhaps even in violation of FCC rules, to have the FCC water down provisions that would open up the 700 MHz spectrum to competition. The FCC has opened the spectrum to bidders in an auction, where the highest bidder gets to offer services over the spectrum, but must also let other service providers access the spectrum too. Verizon, a carrier worried that regulation would let Google or others encroach on its wireless turf, apparently is seeking to make the FCC ease up on a key requirement: that the winner of the bid (Verizon presumably thinks it can win the bid) must open up devices and applications if they use the spectrum. Now Google is crying foul.

Quote of the day: Facebook advertisers are “selling shovels to other miners” – You’ve got to like the analogy by the New York Times’ Brad Stone in his piece about Facebook. He likens Facebook application hype to the 1849 gold rush: “Some [Facebook] developers report earning tens of thousands of dollars in advertising with the applications they have created. Yet their applications are mostly running ads promoting other Facebook applications — a situation that recalls the earliest Gold Rush miners, who earned a living selling shovels to other miners.” Overall, very few people found significant amounts of gold.

Microsoft’s chief executive Steve Ballmer says advertising will make up a quarter the company’s business within a few years — Details here. “Over time, all ad money will go through a digital ad platform,” Mr. Ballmer told a gathering of European ad agencies and clients. “All media goes digital; all advertising goes digital.”

Google remove all ads from its social-networking service, Orkut – This is just the latest sign that social networks are having a much harder time being monetized than people appreciate. Users post pornographic images, and advertisers don’t want anything to do with this. Google said advertising appeared on only 1 percent of Orkut pages. The site is popular in Brazil, but has been accused of containing child pornography among other illicit material. According to research firm comScore Inc., Orkut attracted visits from about 25 million people in August. Perhaps never before has there been such a disjunct between a site’s popularity and such a depressing amount of money that can be made from it.

Research firm Gartner predicts continuing chip-industry slowdown — Already down 4.3 percent from predicted levels, chip equipment orders will stay at their current low levels until late next year, according to Gartner. The research revised capital spending forecasts for the semiconductor industry, trimming off $4.7 billion for a predicted total of $54.6 billion next year. Slowdowns in the chip industry have, in the past, foreboded a slowing of the entire tech industry.

Google’s DoubleClick acquisition may face more hurdles — Not just one, but two committees in the House of Representatives are considering holding hearings over Google’s proposed buyout of DoubleClick. The House Energy and Commerce and House Judiciary committees are reviewing the case, following a hearing last week by the Senate Judiciary’s Antitrust, Competition Policy and Consumer Rights Subcommittee. The hearings may have been sparked by rivals including Microsoft and Yahoo, who are actively making arguments against the acquisition to Washington’s lawmakers. It’s a good thing for Google that the company has already been busy hiring lawyers and lobbyists in Washington; it’s got some catching up to do.

Jahah, the Internet telephone company, has introduced a new service that lets people call you from email for free with a one-click calling button.

This latest could be highly viral, especially for small businesses wanting the equivalent of a free 1-800 number.

The USAToday just wrote a piece looking at how these “J” companies — Jajah, Jaxtr and Jangl — embody the new Silicon Valley dot.com boom. (The story cites us at VentureBeat a few times. I’m quoted saying “you can’t find anyone who doesn’t have a business plan sticking out of their pocket.” USAToday’s author Michelle Kessler also cites me saying there “will be a lot of cold showers.”)

Jajah’s is just the latest innovation in the Internet telephone world, where start-ups are delivering an array of buttons for calls. Jajah’s looks as user friendly as any. We’ve written about Yoomba (Yoomba forces a phone recipient to register though, which Jajah doesn’t), and Orgoo (though Orgoo doesn’t let you make the calls from your existing email; you need to use its email platform). Other services give you ways to integrate phone links within your email, i.e, so that you can click on phone numbers and make calls from say Skype or some other service. Xobni is doing that, as are more mature players like Zimbra (recently bought by Yahoo).

The Jajah button also works from websites, blogs or social network profiles.

The service won’t reveal your phone number to the caller. The call buttons are also customizable (size, color, style), and you can you set the time when you are free to accept phone calls. You can also rejecting or block phone numbers. The buttons are available as a Flash widget, click-to-call buttons or a simple plain text link.

So, to let relatives call you for free, you add your button to your email signature, send them the email, they click on it and call you - they don’t have to be registered and there is no local numbers pay.

All they do to call is enter their phone number in the box, and Jajah calls them back with a line that rings through to you — just like Jajah’s standard service works.

Jajah says its service the first, truly global click-to-call service” (it is available in more than 120 countries). Competitor Jaxtr also provides a link. It works in 20 countries. Jaxtr puts you through to a local line, and so technically isn’t free for those calling you.

One caveat about the Jaxtr button. While people calling you do so for free, you (the recipient) do have to pay for the call, albeit at low Internet call rates. If both parties are registered, however, the call is free for both parties.

Click here to see how it works, or see video below (you won’t see if if you’re reading RSS).

Lypp is a free group calling service that works with your existing landline or cellphone number, and launches a private testing version tomorrow.

It’s a nifty service. Free conference calls. So what’s the catch, you ask?

Nothing to start off with, except for a limited number of minutes: 500 a month.

Here’s how it works: You initiate calls with instant messenger (AIM, iChat, GTalk, Jabber, MSN or Yahoo), from the Web or on your phone, and Lypp will connect you to up to ten people at ten different phone numbers.

The remarkable part of this service is that it end-runs the carriers. Lypp lets you use your IM client on your phones. You send a message to Lypp with who you want to call. Lypp’s server then sends calls out, on its own dime. To sign up, you register through your IM client online. To use it on your mobile phone, you do have to ensure that IM is configured on your phone. Increasingly, this isn’t a problem, though, because IM clients are coming pre-installed. Recent BlackBerry phones, for example, already include GTalk and Yahoo. Or if you don’t have IM, you can download EQO, Nimbuzz or Mig33.

Lypp says it will get several hundred thousand users within 12 months. You can request a test account at beta@lypp.com. You don’t need to download any software to your phone. The company says it will soon add a feature that allows you to initiate calls via SMS and email too.

Here’s the trick: You get a package of 500 free minutes to start off with, and you can earn more minutes by referring friends to the service. You’ll be able to make free calls within the U.S. and Canada.

The company hopes to make money by offering premium service, which will include more minutes and other features. It might consider running ads, too.

The company says the conference call business is $3 billion, and the wireless call market is $200 billion plus. It wants to blow up the conference call business, sucking the costs out of it, says Dan Gibbons, a co-founder.

The application was built on Rails.

One competitor is a Facebook application called Iotum. Another service is Foonz. Both are like FreeConferencecall.com, uses a loophole that allows it to provide free conference call bridging by having the calls bridged in Iowa or other federally subsidized states. However, even with those services, users are forced to pay long-distance rates. They do save the conference organizer from paying the fees charged by other conference call services. But Lypp is offering everything for free.

Finally, there are conference call services provided by folks like Jajah and Skype, which use VoIP and P2P. technologies. However, Lypp is different because it uses the existing telephone (PSTN) network – offering that quality network for free, when these VoIP an P2P services still charge for use, and can be patchy quality.

Lypp has also built an API, allowing people to build on top of Lypp, to be unveiled after launch.

The company is self-funded but is considering raising venture capital.

Jajah, as we’ve mentioned several times, remains among the edgiest of the new Internet telephone companies.

Today, the company seeks to mobilize users in India, offering them free calls if they get five other people to register for the service. Some 100 million Indians have both an Internet connection and a real phone, which are necessary to use the service.

The merits of viral strategy appear obvious considering such marketing has worked well for Internet companies such as Tagged, Facebook and Friendster. It’s the first time we’ve seen such a viral move by a VoIP company, though. It also comes at a time when the industry is in the midst of painful consolidation: SunRocket, another VoIP provider, has gone out of business, leaving 200,000 subscribers without service — after raising $80 million in venture capital, including a significant $33 million less than a year ago from folks like BlueRun Ventures, Mayfield Fund, DCM and Anthem Capital Management.

It’s OK to be innovative when your service is free, but how are you going to make money?

Obivously, companies have offered VoIP for free before, which is the ultimate marketing strategy. Skype offers free calls between registered users, for example. However, Jajah lets participants in the viral program call anyone for free, even if the recipients of the calls aren’t themselves registered (though it applies only to calls within India, to North America and the UK). The calls are free for 30 minutes only. Dialpad, another early VoIP player, got buried by Indian users, who used its free service to call relatives in the U.S., and overwhelmed Dialpad’s network costs. So how on earth is Jajah going to make money, by driving phone call costs down to zero? Jajah says it still thinks people will pay for many calls. After the 30-minute free call limit is up, it charges a low rate, but one which still makes it money: From now until India Independence Day (August 15), India calls will cost 7.3 cents/minute (3.2 INR).

Jajah says it will offer similar campaigns in other countries, hinting Brazil, Russia and China may be next.

Jajah has plenty of competition. Companies like Rebtel and Jaxtr are following closely in Jajah’s footsteps, using a similar way of connecting calls (by connecting your real phone with an Internet line)

A few days ago, Jajah introduced an anonymous calling feature to be used on dating site eHarmony.

It remains to be seen how successful this company will be. It has more than a million users, and says it is controlling more of its infrastructure through partnerships with companies like Deutsche Telekom. It says it is upgrading its sound quality, and that much more is coming this Fall. What’s remarkable is that it has done all this on slightly more than $20 million in funding, much less than the boatloads of funding received by companies like Sunrocket and Vonage (Vonage, a public company, is seeking its stock price at an all time low).

Here’s the latest action:

Free mobile calls, via texting — An Ottawa company called bOK is using VOIP to give Canadians free mobile calls, using SMS. Here’s how it works: You send a text message with your contact’s phone number to bOK, and, just like better-known JaJah, bOK calls both parties — voila, free incoming call!

The service is temporarily free for any phone number in the U.S. and Canada. Anyone with a US-based phone plan, though, can expect to use up minutes. The service will work in Canada especially well, where many carriers offer plans with free incoming calls. The company charges for international calls at standard VOIP (low) rates. Maybe those with friends and families across the Northern border will appreciate this service? You do have to provide your phone number and other considerable data (from birthdate, to address), which is a downside.

The self-funded company emerged about a month ago and now says it has handled 10,000 calls and is breaking even; it hopes to raise a venture round shortly. Besides Jajah, other companies trying to redefine telephony include: Mobivox, Talkster, Truphone as well as Skype. bOK has decided to enter a very crowded market pretty late in the game, never mind any future legal issues. We like what it does, but wonder about its chances for success.

After patent score, Jingle makes a deal – Jingle Networks, the operator of a free 411 service, has partnered with Internet calling company Skype. In the US, Skype users will be able to use Jingle for 411 calls, and add “Free411USA” to their Skype friend list so they can call for a 411 operator — if they are on Skype version 3.5 for Windows. Jingle’s patent is for ad-supported calls, for when you don’t want to use a search engine on your web browser.

Local.com gets own patent for voice and mobile for directory-search assistance — Local.com, based in Irvine, Ca., was awarded a patent for a method of searching local directories on a pay-per-referral basis where users receive results via an operator call, SMS or a number of other options. It includes an ad model, and comes on top of another patent it received in local search last week. Previously-mentioned Jingle also offers SMS-based advertising; Microsoft’s TellMe and Google’s Voice Local Search, are also in the market.

Mister Wong, a clone of Delicious, launches private beta in U.S. — Oddly named German company Mister Wong is arriving Stateside. You’d think it would be called Mr. Schmidt or something. Next, here’s the dirt on this quirky sounding company: 1) It successfully copied the bookmarking site, Delicious, and developed a stable base in Europe; 2) It is trying to use this base to gain a foothold on the US; 3) We’ve heard that Delicious hasn’t grown much since it hit the 1 million mark last year. We’ll be watching to see if it goes anywhere. What we won’t be watching is the Alexa graph that Mister Wong provides on its splash page, comparing itself to such companies as gnolia.com, spurl.net and furl.net (see above). (More from Mashable)

South Korean search co. rules South Korea — Naver.com is the South Korean search engine of choice, and benefits from user participation in search results. While it handles more than 77 percent of all Web searches, search giant Google handles just 1.7 percent. The site is entirely in Korean; as far as long-term plans go, we can only assume that the company is aiming north.

Facebook traffic numbers are up 89 percent this May versus a year ago, according to Comscore – This isn’t surprising news to anyone who has been tracking Facebook for the last year, as the company has been disclosing its internal numbers (if those are to be believed, the site now has 28 million active users). We referenced the trend in March:. The most notable recent development: A huge chunk of new traffic is now coming from over 10 million adults ages 35 and up. This data may be suspect though because of a methodology problem: Total users don’t equal sum of the age segments listed (there’s a 1.2 million user difference). If true, it still suggests older people are joining, even though the site started in college campuses. Now, Mom and Dad apparently want to see what their kids have been up to for the past few years. Techmeme has more blogging about these numbers.

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Facebook Apps are getting translated – Facebook-focused blog Inside Facebook, points to an application, Nestoria, that’s entirely in Spanish, possibly the first non-English app. Facebook itself is currently English-only, although as more people have joined from around the world, they’ve brought their languages with them (like this Facebook group called I LOVE LEBANON). As the post notes, the company is trying to hire somebody to build out localized versions.

updated

Jajah, the Internet telephone company, has created a version of its service especially for the iPhone, and claims to the easiest way to avoid paying the punishing surcharge for iPhone international calls.

AT&T charges $4 a month just for the right to make international calls. Then, if you want to call London, you’ll have to pay 23 cents a minute. With Jajah, it is three cents a minute, and you don’t need to pay a surcharge.

We’re not aware of anyone else that makes it as easy as Jajah to make Internet calls straight from the iPhone. Other services, such as the Truphone, offer Internet calls, but they require WiFi — while Jajah can work off regular cellular service.

You can use the service via http://mobile.jajah.com

You do have to deal with one quirk: As with Jajah’s regular service, once you enter the number you want to dial, Jajah first calls you back to connect you with an Internet line, and then connects you with your intended recipient. It’s a minor change of habit that we’ve gotten used to, having used it.

It has a site explaining more at www.FreeYouriPhone.com.

Jajah continues to be the VoIP company with chutzpah.

It has just scored a major backer: Deutsche Telekom, which on a revenue basis may be the largest telecommunications company in the world. It’s a big ally for Jajah, the small Mountain View upstart that is barely a year old, but which wants to make a run on Skype and other Internet telephone providers.

Deutsche Telekom, Germany’s largest carrier, has joined the $20 million investment in Jajah that was led by Intel and announced earlier this month. At the time, Deutsche Telekom wasn’t ready to join the announcement. The exact amount of Deutsche Telekom’s investment is unknown.

The endorsement is significant because no other Voice over Internet Protocol (VoIP) company has partnered with such a large company. Vonage allied with AT&T to sell its a service to new DSL subscribers, but that effort largely seeks to replace landlines. Jajah’s strategy is not to replace a landline, but to add to it. The idea is that Deutsche Telekom would retain the customer, who would continue to make locals calls, but use Jajah for long-distance, said Tevor Healy in an interview with VentureBeat. While the two companies will remain separate for now, the partnership is in a testing phase. However, Jajah will have access to Deutsche Telekom’s large and modern telecom backbone to route its calls — giving it cost and quality improvements.

Deutsche has not did not have a VoIP offering. The giant has about $80 billion in revenue in mobile, broadband and fixed line offerings, and operates in more than 50 countries — and known in the U.S. as T-Mobile.

In the U.S., most carriers have tried to build their own VoIP services, determined to own their offerings outright. In Europe, however, carriers have been readier to consider partnership. Jajah may be one way for Deutsche to add things like IM and video calls down the line, said William A. Stofega, research analyst at IDC.

Jajah says it has more than two million users from 55 countries.

We use Jajah all the time.

Jajah, the Internet telephone company living up to its “scrappy” reputation, has just pulled in $20 million from the venture capital arm of giant chip maker Intel and others.

This is a big endorsement for the young company, which goes up against a multitude of competitors. It now plans to target Skype, armed with a valuable patent it will borrow courtesy of Intel.

Jajah also signaled it is about to obtain funding from a major telecommunications company in three weeks or less. “The new investor will really rock the industry when it’s announced,” said chief executive Trevor Healy in a phone call with VentureBeat. He said the valuation of this latest investment is “significantly higher” than during the last round.

The move is significant beyond the stamp of credibility afforded by Intel’s brand and deep pockets. A large part of Intel’s business revolves around integrating chips into PCs. And Jajah gets access to Intel’s patent (No. 7120140) that covers interaction between digital phones and computers — and lets a telephone service be downloaded onto PCs as software. This technology would integrate Jajah’s service more seamlessly with devices, making it a so-called “softphone.” This lets it match Skype’s software. It also helps give Jajah the legal protection it needs to avoid the sort of lawsuits that plague Vonage. Jajah’s advantage over Skype is that its service calls you back on your land line or mobile phone, so you are not tethered to your PC.

Jajah’s vision now is to integrate itself into any device, and to allow you to call anywhere, anytime, from anyplace.

While Skype is moving in a similar direction, integrating its service within mobile phones, Jajah argues its back-end infrastructure is more modern than Skype’s. See our earlier coverage on this here. Jajah has been expanding coverage with confidence.

To refresh, the young company, now based in Mountain View, Calif. and Austria, lets you make cheap Internet calls from your PC or mobile phone by using the Web. You enter your recipient’s number, and Jajah’s service simultaneously hooks you up with an Internet line. I use it to call my relatives in London on a weekly basis, replacing Skype, and I’m happy with it.

This is the company’s third round of funding. It was originally backed by Sequoia Capital.

Jajah says it has more than two million users, and that number should be five million users by the end of the year. A high percentage of registered users remain active users, Healy said, but would not be more specific.

We’ve called Jajah, the Mountain View Internet phone upstart both quirky and scrappy.

It remains so. It has just cut some deals that will let people call for free to anyone with a landline, even if those people aren’t registered with Jajah. For now, Jajah is doing so only in two European countries, Germany and Austria, which have a combined population of 110 million people. If it makes money there — and it says it can, via advertising — Jajah may point the way to a future of free calls in the U.S. and elsewhere.

Skype doesn’t come close to this. In fact, Skype just increased its calls for Skypeout, which is the service you use to call people who have not downloaded Skype.

Jajah is offering its service via unconventional means: It has signed partnerships with three large media companies in German and Austria. Those companies — Bild, Germany’s largest newspaper; ProSiebenSat1, which owns two major German TV stations, and NewsAT, an Austrian station — will spend 7 million euros to advertise Jajah’s Internet phone service (they will point people to their own web pages, which will have a co-branded Jajah service from which people can make calls). These media giants want to do so, because they’re seeking traffic on their own Web sites. Deutsche Telekom, Germany’s large phone company, is part owner of Bild, is participating. A million of its customers are canceling their phone lines every quarter, fed up with high phone bills. DT sees the relationship with Jajah as a way of holding on to customers (customers will want to keep their existing contact numbers, even if they use Jajah for phone calls).

There’s a slight hitch to all this: Jajah continues to cut calls off at random times, sometimes after twenty minutes, sometimes after a half-hour, sometimes more, you can never tell. It bothers some people more than others.

Jajah will keep a full 50 percent of any advertising revenue that it sells on the pages it shows people while they make calls. It will sell a banner and a skyscraper on each page, and because it has signed with the media companies, it will have an easier time getting that advertising. Jajah is starting in Germany and Austria because advertising in those counties is relatively lucrative. It will expand into other countries, including in the UK, Italy and France, chief executive Roman Scharf told VentureBeat.

VentureBeat uses the service frequently for long distance calls, because they’re cheap, and we don’t have to stay tethered to our computer. You type in someone’s number, and the service calls your landline; you pick up, and Jajah puts the call through. Sounds like a hassle, but it works for us.

We wrote about the company here.

Jajah will, however, charge for phone calls made to mobile phones.

On Christmas day, Jajah will offer free calls everywhere, it told us.

Catching up:

YouTube is making $7.5 million a month –Everyone has been guessing whether YouTube is profitable, given the high costs it faces hosting all its videos. This guy says YouTube is doing $7.5 million a month in ads, and is profitable.

FON, the company that wants to encourage people to share their WiFi routers, having problems? — The general manager of US division has left. We’re beginning to think this Fon idea my be too clunky to fly. You buy a router to let other people use it, and it lets you tap into other peoples’ FON routers when you travel. It is a chicken and egg problem; Why buy it, unless you know lots of others have bought it too? Problem is, there are so many ways to get online these days. For starters, FON’s own backer, Google, is building out free networks. Google is using a WiFi router built by Mountain View’s Meraki.

Filmloop to launch online version — Filmloop, which let people create slideshows on their desktops and then have friends see updated versions automatically on their own computers, has created an online (browser) version too. It’s facing plenty of competition, but says more than 1 million users have uploaded 42 million photos.

Time for these podcasting services to make money — Evan Williams, of podcasting start-up Odeo, is making some public confessions about having trouble, and he is shutting Audioblogger, which allowed you to post on your blog via a telephone call. (Details here.) So eyes have turned to how these companies can make money. PodZinger, an audio and video search engine of Cambridge, Mass., has just launched a way for podcasters to insert advertising in both audio and video files. It says it has “content classification” technology which allows it to match ads to the podcaster’s content. It also says it has algorithms for analyzing a user’s “intent” and provides ad matches that way. The content creators, or podcasters, can decide whether or not they want the service, which can bring them extra revenue — which they share with PodZinger.

Ning’s video & photo move — The Silicon Valley start-up Ning, backed in part by Netscape founder Marc Andreessen, gives you multiple tools you build your own web site, as we’ve mentioned. Now it has released more stuff, including letting you customize your own niche, YouTube-like video site, or Flickr-like photo site. The company took us through a demo last week, and it’s easy to use. The video site gives your own embedded player that you can brand as your own, which you can place in your blog or at MySpace — but which runs on Ning’s servers, and so you aren’t paying hosting costs. Ning bets it can cover the costs by taking a share of the advertising revenue. It says its advertising is lucrative compared to some other sites, because its users are creating content-focused sites, and so can be targeted by advertisers appropriately. The ads are generating $2 or more per 1,000 page views, the company said.

Rebtel raises $20 million for (complicated) online calls — Like Jajah, this Stokholm company (co-founder Greg Spector is here in Redwood City office, though) Rebtel lets you make calls cheaply by accessing its own system of low-cost Internet lines. But it gets complicated. It works when you dial a local number it has assigned for the person you are calling (yep, a different number than the one you already have for him or her). Once you call the other person, they have to hang up, and call you back. There’s logic to it: The system is trying to find the cheapest combination of Internet and local lines. It has raised $20 million in venture capital, including from Benchmark and Index. They charge $1 a week, and calls are otherwise free. We’re seeing a lot of these cheaply built phone services emerging; they’ll appeal to the frugal phone user, but not to those of us who want simplicity. (More here).

Asides:

Speaking of ads, there’s not enough place online to host them all — Here’s news that 100 million people watched online videos in July, and evidence that advertisers can’t find enough online inventory to put their ads.

New VC podcast — Levensohn Venture Partners, a venture firm in SF has started a podcast series called VC — Inside Out.

Bono’s direct connection with Apple, gone — Apple said Fred Anderson, who served as the company’s chief financial officer from 1996 until 2004, resigned from the board, because of the option scandal. Anderson remains a partner at the Silicon Valley buyout firm Elevation Partners, which as you’ll remember is where U2’s Bono hangs out, and who promoted the U2 iPod.

Google executive, Marissa Mayer, shows how to hold meetings efficiently — Meetings can be a waste of time. What if your company had the same discipline as Marrisa? You’d get a lot more done. This shows the Google trait of schizophrenia — creativity and discipline in one.

Google has a bunch of new products — No wonder Google co-founder Sergey Brin recently burst out, criticizing his developers for releasing too many products, and not focusing on making them work well. Here’s a recap of last week’s bombardment alone. One lets you restrict the sites you are searching (details here). Next, here’s the latest on the Google gadgets you can put on your Web site (choose from 1,200 of them). Google has also launched an experimental site, called Searchmash, tracking behavior of users off its main site. There’s a new initiative to allow you to build Web apps on top of Google search, whereby Google has opened its APIs to allow an AJAX search box for videos (click on one of the videos to see), for example. Finally, Google launched Code Search, a way to search for source code from around the Web.

Yahoo’s flip-flop– Yahoo has donated $1 million to Stanford University’s John S. Knight Fellowships for Professional Journalists, seven months after handing over information about a professional journalist to Chinese authorities. You may view it cynically, but this is a good move, nevertheless — it is earmarked to support journalists from countries where there are restrictions on freedom of the press.

Updated

Jajah, a Mountain View VoIP start-up that began offering free phone calls in June, has gone one better. It is now allows free calls from your mobile phone.

It just launched the service at DEMO.

Jajah is a scrappy, quirky company. It can, without warning, cut off calls if you talk too long. But Jajah may be one to watch nonetheless — because it works so simply and for free. And it is raking in the dough, and looks to be profitable. It may even be looking at IPO prospects soon, if you believe their numbers.

We wrote about Jajah here. Until now, Jajah has let you dial your call from a PC. It puts through the call by doing the following: Jajah calls you back on your land-line, you pick your phone up, and voila, you find it connecting you to your friend across the country, or wherever you called.

Now, you can make free calls from your mobile phone, regardless of whether it has a browser or you have to rely on its SMS or some other interface. It lets you talk for free as long as the person on the other end is registered. If not, you pay low rates.

The bugs we experienced with the service a couple of months ago appear to be fixed. But the company is still cutting people off if they talk for free too long, he conceded. He said Jajah is looking for the best way to warn customers that their call is nearing an end. They still don’t have a clear policy for when that cut-off point is — an example of how the company seems to get away with things by offering an otherwise useful service.

It makes money by allowing you to make scheduled calls at specific dates and times. It also allows you to text message your contacts for five cents. The conference calling is simpler and more compelling than most other services we’re aware of. You simply enter the numbers of the people you are calling (up to ten people), click a single button, and presto, it is calling. Moreover, you don’t have to be on your computer, because, as described, it connects you with your phone. It costs 2.5 cents a minute for each connection. So if you have four people on the line, that’s 10 cents a minute — or $6 an hour. That’s far cheaper than most other services we know.

Jajah’s Scharf says Jajah’s network architecture is more distributed than Skype’s, having servers in multiple areas of the globe, allowing it to pay only for local voice calls (via the “last mile”) after routing the rest of the call through the Internet. The company’s technology transfers voice to Internet Protocol and back to voice again.

He says the company’s goal is to become everyone’s “second” phone service. It can only work if people have a primary phone account. He says Jajah is about to hit one million paying users any day now — which is impressive when you consider the more mature leader Skype has only 1.7 million total paying users.

With $10 per month in revenue on the average user, and assuming it can get to a steady one million paying users a month, that means the company could soon be raking in more than $100 million a year — which is IPO territory. It has margins of $3 per month per user, so it may soon be profitable too (though we don’t know what its up-front fixed costs are). The company has 50 employees.

Scharf has a good story about how he got the venture backing from Sequoia Capital. Heavy-hitting Sequoia venture capitalist Michael Moritz (who backed Google and Yahoo) was sitting in an airport next to someone who was using Jajah’s prototype VoIP service. Impressed, Moritz put out a search to find the company. Somehow, Moritz’s team got mixed up and thought the company was based in Australia, and looked for the company down under, before realizing that Jajah was really based in Austria, Scharf said. Moritz’s team liked the company so much, they decided to fund it even though at the time Sequoia’s bylaws didn’t allow for a European investment. Sequoia was motivated to alter its statutes to be able to make the investment.

However, European firm 3i almost stole the deal. They were talking with Jajah first, and had made an offer. Sequoia had come along and shown its initial interest, but the firm unexpectedly hesitated for several days, forcing Jajah to accepted the 3i offer, Scharf explained. Scharf later heard that Moritz had assumed Jajah was bluffing about having an offer from 3i in order to force Sequoia’s hand. When Sequoia found out the deal had actually been signed, its partners were stunned, Scharf said. “There was silence on the phone,” he said. However, Scharf was later able to cite a 60-day right-to-rescind clause in the 3i deal, and accepted the offer from Sequoia instead.

Update: We’ve corrected our original reference to the number of paying users Skype and Jajah have. We originally listed the numbers as “monthly” paying users, when the numbers actually refer to “total” paying users.