Jajah, one of a host of companies that allow users to make international phone calls cheaply over the Internet, will be acquired for about $200 million by the large Spanish telecommunications company Telefonica's mobile division, O2, this week, according to a report in the Israeli financial news site TheMarker Sunday.
We reached Jajah's chief executive Trevor Healy tonight, and he declined comment. However, a source suggested the deal, if there is one, has not gone through yet. [Update: And we just reached someone in O2's press office, and they said this is "entirely speculation" and that they have no comment.]
Last month, TheMarker reported that O2 was bidding for the company against Cisco and Microsoft. If that's true, the acquisition frenzy is indeed continuing in full force. Jajah has been working hard for years to get noticed. Why is the bidding only starting in earnest now? Well, one answer is that the economy is recovering, and larger companies are rushing to buy up companies with traction while prices are still relatively modest. Jajah is a hell of a lot cheaper than market leader Skype (valued at $2.75 billion), and there are few other companies that come near to Skype in popularity or size. There's Vonage, and while that company is valued right now at $235 million, it has a lot of baggage with it, namely a bruised history.
But it's true that mobile telephony is hot. Mobile operators are beginning to accept that VoIP is something consumers will demand, and there may be a land grab brewing.
Jajah boasts about 15 million subscribers and allows calls to 125 countries. I'm personally a big fan of Jajah, having used it since it launched in 2005 to make international calls. It lets me use my fixed phone, because once I dial the Internet call over my PC, the service calls me back on the fixed phone and I can walk around my house chatting just like I would with a normal call.
The company has raised $35 million from Sequoia Capital, Deutsche Telekom, Intel Capital and other investors. It has recently signed big deals to let Yahoo and Microsoft use its technology to serve their customers with Internet calls.
Jajah launched at DEMO.