British Telecom Buys Ribbit
British Telecom has acquired Silicon Valley-based Ribbit for roughly $105 million, according to various news outlets. Rumors of the deal first emerged on Venturebeat, though company officials vociferously denied any deal. Our sources say that the delays were mostly due to internal issues at Ribbit.
Context & Ripple Effects
Ribbit launched in late 2007 as a web-oriented phone company and then positioned its platform for voice applications in early 2008. BT's purchase moves that effort from an independent Silicon Valley venture into a major telecom operator.
An earlier report had already linked BT to a proposed Ribbit acquisition intended to challenge GrandCentral. The confirmed transaction resolves that reported strategy, while the contemporaneous denials show how closely held the negotiations were.
First-order effects
- BT gains ownership of Ribbit and its voice-platform effort, while Ribbit's customers and product direction move under BT's control.
- Ribbit's independent push into voice applications becomes part of BT's product and partnership decisions rather than a standalone company strategy.
Second-order effects
- The acquisition gives BT a vehicle to pursue the web-phone market that Ribbit had targeted, increasing competitive pressure on services such as GrandCentral without requiring BT to build an equivalent platform from scratch.
Third-order effects
- If other telecom operators follow BT's lead, carrier participation in internet voice services may shift from internal development toward buying application-platform startups, concentrating control of those platforms with network owners.
The trend: Telecom incumbents are using acquisitions to add web-based voice software and compete beyond their traditional network services.