VentureBeat

BT, the dominant British telecommunications company, has acquired Ribbit, a company that has styled itself “Silicon Valley’s first phone company,” for $105 million.

VentureBeat first heard news of the deal in July and reported it. At the time, the company’s spokesman Don Thorson adamantly denied that any deal had happened, but it was clear something was up. Today, the company confirmed the amount of the deal.

This is an impressive performance for Ribbit, which first launched in January. In a day when there are hundreds of VoIP companies struggling to be heard above the noise, Ribbit came along and showed how success is still possible — if you’ve got deep technology, and put together a sharp team.

Mountain View, Calif.-based Ribbit’s software lets you make a phone call from a web page, or direct your own phone calls to a web page. It includes ways for you to do things like transcribe these calls into text, that you can then search. More importantly, however, the company launched in December a platform for developers who want to build Ribbit’s features into any other application — including a way to sale the phone applications to large companies.

Notably, Ribbit built voice services for online business software company Salesforce, which includes the first service that combines mobile voice automation and so-called software-as-a-service. Ribbit released a consumer-facing product called Amphibian.

We should note the seven month launch-to-sale was deceptively simple. The company was actually built upon years of prior work of its founders, Ted Griggs and Crick Waters. At an earlier venture, Griggs (pictured left) had built a “soft switch” for the phone service that underpinned Ribbit. They brought in AT&T and Sprint executives, and then married that experience with the Web 2.0 magic from engineers they lured from Yahoo and EBay.

The company had raised only $13 million over the past two years. It included $10 million in a second round of capital led by Allegis Capital, with KPG Ventures participating, and before that, $3 million in first round funding from Alsop Louie Partners. It’s a nice win for Alsop Louie, a relatively new fund, which was earliest into the deal, and therefore earned the highest multiple.

Ribbit will continue to be operated independently, but will be a fully owned subsidiary of BT. The move continues an effort by BT to move into other sectors, i.e,, to make money from other services than from pure phone calls.

Thorson said he was forced to deny the initial rumors becuase a deal hadn’t been completed, and because the London stock exchange takes a dim view of deals that are leaked before they’re finalized.

Update: Anthony Ha here. I just got off the phone with Griggs and JP Rangaswami, BT’s managing director of service design. Both of them emphasized that Ribbit fits into BT’s larger goal to transform itself into a next-generation telecommunications company — as Matt notes above, BT wants to move beyond just providing the “pipes” for phone calls, and enabling voice features in any software application is an important component of that. As Rangaswami put it, this “raises the ante in the overall communications platform race.”

For Ribbit, on the other hand, Griggs says BT offers  a “firehose” of opportunities, starting with BT’s 21CN network.

When the possibility of an acquisition came up, Griggs says Ribbit was already looking for a global partner and considering a third round of venture funding. The companies’ similar visions, plus the fact that BT wanted Ribbit to stay autonomous, sweetened the deal.

Updated with a response from the company.

Ribbit, a company that has styled itself “Silicon Valley’s first phone company,” has been purchased by BT, the dominant British telecommunications company, we’re hearing.

[Update: A company spokesperson has gotten back to us denying that there's been an acquisition. However, the company wouldn't comment on whether or not acquisition talks were taking place. There are a few possibilities here. One is that it my source (and I) are completely wrong and that there's nothing happening. Another possibility is that the deal hasn't officially closed but is near closing, with some formalities still to be taken care of. Yet another possibility is that Ribbit is not just looking at an acquisition from BT, but is talking to other potential acquirers; or maybe the company has turned down an offer (or two) and is looking to stay independent. We're digging for more. Let us know if you know anything to add. My source provided me with enough off-the-record details that I think an acquisition is at least in the picture, which is why I decided to publish in the first place.]

[Update Two: If you chose the second possibility from my previous update, then it appears you're correct. Techcrunch is reporting that Ribbit has been bought by BT for $55 million.]

Mountain View, Calif.-based Ribbit’s software lets you make a phone call from a web page, or direct your own phone calls to a web page. It includes ways for you to do things like transcribe these calls into text, that you can then search. The company launched in December, with a platform for developers who are looking to build phone-based web-connected applications for large companies.

Most notably, Ribbit has built voice services for online business software company Salesforce, which includes the first service that combines mobile voice automation and so-called software-as-a-service.

Ribbit also released a consumer-facing product called Amphibian last month.

Meanwhile, a number of other Silicon Valley companies are also working on variations of the concept of connecting calling services and web pages.

Ribbit recently raised $10 million in a second round led by Allegis Capital, and joined by KPG Ventures, which follows on a $3 million round raised from Alsop Louie Ventures more than a year ago.

Here’s a video about the Ribbit-Salesforce integration:

Ribbit is a remarkable new company, and it knows it: It calls itself “Silicon Valley’s first phone company.”

That sounds like marketing overreach for a young company barely launched, but when you look at what it’s doing, you can see why they can get carried away.

Ribbit, based in Mountain View, Calif., has developed technology, built on years of prior work of its founders, that lets a developer insert phone software into any Web application. The developer doesn’t have to know anything about phones.

The end result, Ribbit predicts, will be thousands of useful applications for regular people. Ribbit’s applications let you make calls from any page, direct your calls from your own phone to any Web page, and gives you a way to manage it all in new ways. You can transcribe it all into text, search it, and use it to see other kinds of information. Because it can integrate into any application, Ribbit can do things like peer into your friends’ MySpace, Flickr or other accounts, pulling your friends’ latest blogs or photos, so you can consult it all even as your friend calls you on the Web phone.

The company first launched in December, as a platform designed for developers building phone-based applications for large companies. To showcase this, Ribbit built Ribbit for Salesforce, which adds voicemail, memos and calling to your Salesforce account, so you can manage all your clients with your web-based phone. The person who built the application, a former Salesforce engineer, knew nothing about phones.

Today, at the DEMO conference, Ribbit announces the launch of a platform for consumer applications. It’s called Amphibian, and it already has some notable applications on display. About 2,500 developers are building Ribbit applications, the company tells VentureBeat. There’ the Ribbit version of the Adobe AIR iPhone, which builds on the popular application AIRiPhone. Thae original application features an iPhone suspended in the air on a Web page, and lets you play with its data, turn it around and so on. Ribbit’s application, however, has added a way to include your own phone’s features within it and make calls.

There’ also the Chalkboard phone, which lets you make calls from your computer with a Flash-based phone, designed like a chalkboard. See iGoogle screenshot here.

The company was co-founded CEO Ted Griggs and Crick Waters. They spent nine months researching how people used phones. They noted how people use a cellphone and VoIP services from their computer, but that these two services were in silos. Services Jajah and Skype are good at letting you make cheap VOIP calls, but they aren’t designed to be inserted in other applications. The Ribbit founders also noticed that each large company needs phone features to work in different applications, tailored to the company’s specific workflow needs, and that it cost at least $250,000 to build phone features to fit into their application set.

So Ribbit decided to make it very easy: Provide an API to let non-phone experts build phone features on their own, allowing them to put them on any Web page and tie them into any application. Former AT&T and Sprint product executives, they recruited some Web 2.0 engineers from Yahoo and eBay to help them.

Griggs earlier founded a company called Junction, a VoIP software company that was merged with Summa Four, and which was sold to Cisco in the late 1990s. Ribbit’s core invention is something called a telephone “soft switch,” so called because it is a piece of software that can manage phone calls. Griggs built the basis of it at his most recent company, Syndeo. That company received $98 million in investment during the Internet boom years, but had struggled during the downturn and slow buildout of new networks in the U.S. It was a carrier grade phone switch, used in Japan for VoiP, but it was otherwise neglected. So Griggs acquired the intellectual property for the switch. It was built to work with any major protocol: SIP, PSTN, etc. Rejigged for Ribbit, this means it can call fixed line numbers, mobile phones, but also Skype, GoogleTalk, or MSN — all voice networks running proprietary protocols.

The Ribbit team added a flash interface, to handle calls from within any browser, so that it can work from almost any kind of data object, including jpegs and more. This lets you take messages, transcribe voice into text (using an application called Simulscribe), search it, add directory services, integrate it with Plaxo so you can manage your contacts, and more.

Applications are built with Adobe’s Flex development tools.

Ribbit recently raised $10 million in a second round of capital led by Allegis Capital, and joined by KPG Ventures participating. This follows $3 million raised from Alsop Louie Partners more than a year ago.

Ribbit charges developer a fee: $25 a month for the basic integration. Additional charges are made services such as voice mail, contact management and transcription services, call logs, provisioning and billing. Building applications is free, but once an application is being used for commercial purposes, Ribbit charges. It also charges the developer for the calls: $30 a month for up to 20 people using the service. The developer can charge their own clients as they want.Ribbit also lets developers sell applications to consumers from a Ribbit store. These apps are analogous to ringtones — except they are phone applications instead. For example, there’s Ribbit Earth, which shows a globe and colored lines connecting the places you are calling. Developers can charge consumers whatever they want. If the developer charges $2.99, he keeps 80 percent of that, and Ribbit takes 20 percent.

Here’s how it works for you, the consumer. You provide our phone number, and Ribbit looks up your carrier, and then gives you a simply set of instructions to forward your calls to the service. When you get an incoming call to your phone, you can do one of two things: You can answer it, and talk as normal. Or, if you ignore the call, it goes to Ribbit’s platform, and it can then go to any Ribbit enabled page you’ve chosen to place your Web phone. It can go to your Salesforce dashboard, for example, where you can manage incoming business calls, and see audio files or see them transcribed. Or you can have it go to your MySpace or other page (see screenshots here).

Ribbit also offers a social network features, too. When receiving a call from a friend, you can have Ribbit call up the feeds from that friend (your friend’s blog, LinkedIn account, Flickr, YouTube, etc) so that you can see what he or she has been up to lately, right when you’re talking with them.

Qwaq, a Silicon Valley company seeking to let company work groups collaborate in a 3D online virtual environment, has just raised $7 million in financing.

Virtual collaboration might sound fanciful, but increasingly experts are saying this is where the office environment is headed. Well-known venture capitalist John Doerr is just the latest to speak of a 3D “radically immersive” Web and to say that he is looking to invest in it, though he is not the backer of Qwaq. In the latest online 3D environments, users can turn to each other and carry one-one-one conversations, or one-to-many conversations, just as in real life. Qwaq tries to extend that vision, but is still in early stages.

We’ve played with Qwaq, and here’s how it works:

You enter a virtual room, occupied by other users and objects like tables and posters on the walls (see screenshots).

Many of those objects are your standard desktop items. A big square poster on the wall, for instance, might be a Word document or Excel spreadsheet. When you click on the spreadsheet with your cursor from across the room, or access it via toolbar command, it’ll expand to fill your screen.

You see what the other users are doing in real-time, as they move around and modify objects, such as the aforementioned Excel spreadsheet. If you are editing that spreadsheet, you can also see another user’s person as they modify each cell.

There are some less obvious examples of objects. One the company showed me was a 3D diagram of a molecule that a biology team could study. Another was a virtual representation of a patient’s head, which could be used for illustration at a meeting of physicians in their virtual conference room. You can also place “real world” objects into your room, like fans or house plants, for ambiance.

You can chat with the other users, add or subtract objects, or move through different rooms as desired. There’s not much lag, and your computer doesn’t have to be all that powerful.

Qwaq is just one of several companies pursuing this vision, although it is the first solely focused on large company (enterprise) collaboration to get venture backing. Tixeo, of France, is another start-up focused on the same market. A range of other companies are offering tools or other initiatives to set up virtual worlds, though they vary in their focus on letting corporate groups collaborate. They include Second Life, VastPark, ProtonMedia, Forterra Systems and Multiverse Network.

Here’s why Qwaq’s efforts are significant.

Online collaboration tools are increasingly in use, but typically are limited in their use (Google Docs, for example, allows real-time collaboration, but with no way for group communications). Qwaq is more flexible. It provides a way to share any program file or resource across computers. Placing everything in a virtual environment allows for a larger number of objects than a straightforward desktop interface. Say you’re working with a project team on a collection of a dozen different files and documents. By virtually looking around the room, you can see who is working on what, and what’s available to be worked on, more easily than you can with most other collaboration programs.

Chief executive Greg Nuyens talks a lot about “intuitions” in a 3D environment: Our sensory apparatus are much better for operating in a 3D world. It lets us use our brain, our visual cortex, as well as sound as a cue to activity. All of this is under-used on the desktop. (With Qwaq, you can choose whether or not you hear people talking in the program, and there are sounds for various actions.)

This is just the beginning of virtualization. Business computers tend to be less powerful than home computers (which are often equipped for gaming). Second Life has thrived, in part, because it is best used at home with computers having better graphic cards and memory. Qwaq has thus been designed with a simpler interface. Over time, Qwaq aims to handle and represent more tasks.

The company won’t say how many users it has, but the number is small. The company charges between $30 and $60 per user per month.

The financing round is the company’s second. It was led by Alloy Ventures and Storm Ventures. Previously, Qwaq raised less than $1 million in from KPG Ventures.

Doppelganger, a virtual world site, has just expanded its offering aimed at teenagers and young adults– with an emphasis on music, dance, and chilling out at bars.

The new site, called vSide, finds itself competing against a number of other virtual worlds, from Second Life, IMVU and Habbo Hotel. While it will have to fight for an audience, the market is hot for these companies if they are successful. Disney recently acquired another site, Club Penguin, for $700 million — that one based on a happy world of penguin avatars for kids.

Doppelganger, of San Francisco, hasn’t experienced much buzz since the launch of its initial test version in February. It has yet to register on the radar of traffic measurement company, Hitwise, for example (see chart below for the top virtual/role playing Web sites for July 2007). However, Doppelganger’s proposition in vSide — a sort of hipper, music/video version of Second Life — makes sense. What better way to feel cool than to hang and chat with friends while listening or dancing to music in a virtual world?

Doppelganger also raises $11 million in new financing, bringing its total to $25 million. (See our earlier coverage here). The latest infusion was led by ComVentures, and included existing backers DFJ, Draper Richards, Trident Capital, KPG Ventures and Greycroft Partners

Virtual worlds are a bit of a mystery. I understand the appeal online role playing games like World of Warcraft — where there are missions to do and bad guys to kill. However, Second Life, where, to no particular end, you can walk around, hire prostitutes and barrage other players with flying penises, has always struck me as bizarre. Yet there are apparently millions of people actively using that site.

Doppelganger’s vSide falls somewhere in between the two. Like in any other virtual world, you create and customize an avatar — your digital doppelganger — and can then meet up with friends, go to clubs and so on. In an interesting touch, the site has included a “murder mystery” mini-game. To solve the murder, you have to team up with other users to investigate people and evidence. As you advance, you adorn rare clothing, which you must inspect for clues to open up new parts of the world. Solving the mystery enhances your virtual status, and gives you access to VIP sections of the club.

There are also stores where you can spend real money to buy your avatar designer clothes (Jay-Z’s Roc-a-Wear is a partner). Along with in-game billboards and product placement, selling virtual goods is the way the company aims to make money.

Doppelganger is developing relationships with a number of celebrities and musicians,, most notably Tyra Banks and the successful indie record label, Downtown Records. The virtual neighborhoods are flanked by virtual apartments for celebrities and bands. You can visit these apartments as well as create your own — where you can throw dance parties and control the music.

Since February, Doppelganger claims to have since garnered a couple hundred thousand users. The company won’t say how many of these are active, but notes that those users log an average of 11 hours per month, and 77 minutes per session. Its goal is to become the “next generation of social entertainment.” As Dean Takahashi points out in today’s Merc, “there is so much competition for the leisure time of young people that it will be hard to rise above the noise.” And, as these Hitwise numbers show, Doppelganger will have to rise a lot: