Rich Tehrani, Editor in Chief at TMC and prolific VoIP industry writer, penned a recent post with some thoughts on MagicJack, current industry media darling and scourge of ITSPs everywhere.
Tehrani gives MagicJack high marks for their marketing campaign and product branding. I agree, they have done a good job of getting the word out about their service.
Rich also gives MagicJack props for letting their freak flag fly, daring to include mention of the technology gears behind their service and not hiding in the closet from an often VoIPoPhobic consumer audience. Heck they even modded the USB stick ATA so you can see the board, chips and circuits inside.
So I’m reading Rich’s post and nodding in agreement right up until the end, when he remarks:
I suspect we will see more companies doing similar things and packaging their products in a like fashion and switching to pricing plans that are very close to this offer.
I disagree here. One fact missing from the analysis of MagicJack is that their business model is built off the idea of subsidizing their service delivery costs by borrowing a monetization strategy that is the foundation of most web services…..ADVERTISING!
Rob Beschizza at BoingBoing Gadgets peeks behind the curtain and sees that the devil is in the details, and that privacy advocates are not likely to be signing up for MagicJack anytime soon.
From MagicJack’s EULA (End User Licensing Agreement):
“You also understand and agree that use of the magicJack device and Software will include advertisements and that these advertisements are necessary for the magicJack device to work … Our computers may analyze the phone numbers you call in order to improve the relevance of the ads”
Any claims, legal proceeding or litigation arising in connection with the magicJack device or Software will be resolved by binding arbitration … in Palm Beach, Florida.
Hmmmm…..”Our computers may analyze the phone numbers you call in order to improve the relevance of the ads”….
Does that allude to geo-targetting of local advertisements based upon area codes dialed? Or something more sinister like packet sniffing and keyword targetting based on actual conversation snippets from private phone calls?
I don’t buy the notion of consumers buying into ad supported phone service at a massive level, creating a trend that would shape the overall industry. That’s just my opinion, and I may be called out for it in the future and I’m willing to take the heat for it.
I wrote about using MagicJack to emulate POTS service with an IP PBX last year. At least one of our readers was working on gaining access to MagicJack’s SIP proxy in order to bypass the need for their USB dongle.