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Archive for Sunday, August 10, 2003

MP3.com founder starts new venture

August 10, 2003

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After tilting at powerful record labels and Microsoft Corp., MP3.com founder Michael Robertson is challenging the telecommunications industry with a venture that offers unlimited free phone calls.

SIPphone Inc. of San Diego, which Robertson announced last week, has begun selling telephones that transmit calls through a user's high-speed Internet connection.

The catch is, the devices can call only other Internet-based phones in the company's directory and toll-free numbers.

That's only a tiny fraction of the phones currently in use around the world. Nevertheless, Robertson contends his company can spur the development of a much larger market by offering low-cost, easy-to-use Internet phones.

Robertson, who funded SIPphone personally, said the new company springs from the same logic that inspired his two previous efforts -- MP3.com, which allowed musicians to distribute their songs independently of the record labels, and Lindows.com Inc., which developed an easy-to-use version of the Linux operating system for personal computers.

Robertson sold MP3.com in 2001 to Vivendi Universal. He serves as chief executive of San Diego-based Lindows.

SIP stands for Session Initiation Protocol, an emerging standard for telecommunications over the Internet.

Although a growing number of firms are offering SIP-based services, it could take years for the industry to develop a central directory or linking service that would enable all Internet phones to connect with each other, said David Fraley, a principal analyst for Gartner Inc.

SIPphone is charging $129 for a pair of phones -- less than other providers of easy-to-use Internet-based phones. But Fraley said he wasn't sure who would want to buy them.

Robertson said he expected demand to come from businesses with branch offices overseas and consumers who make many international calls.

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