Reuters - ooVoo takes on Skype, Cisco in video conferencing

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ooVoo takes on Skype, Cisco in video conferencing

Friday, Jul 17, 2009 10:48PM UTC

NEW YORK (Reuters) - Start-up ooVoo is hoping to take on everybody from Skype, the Internet telephony arm of eBay, to Cisco Systems with a new video conferencing offer for small businesses.

While Skype has the higher profile, New York-based ooVoo has quietly built up 7.5 million registered users in the last few years with a service that supports video chats between up to six people and up to six phone participants.

Now, the fledgling company is adding a desktop sharing option that will let business colleagues view each other's computer screens and enable remote collaboration. It will also block advertising for business users who pay a monthly fee.

"We took what we had with the consumer and packaged it with a business plan," said ooVoo CEO Philippe Schwartz who said that about 20 percent of the company's current users were business customers even before its business-targeted plan.

Cisco's development of a telepresence video conferencing system, which uses large screens and shows life-like images, has created renewed interest in video communications in recent years. But such systems cost thousands of dollars to install, at a time small businesses are looking to shave costs.

A few years ago, Cisco also bought firm WebEx, which lets people share documents and collaborate online.

Schwartz hopes to double ooVoo's customer base this year and increase business users to as much as 40 percent of total customers as companies look to cut costs in a weak economy.

"You're seeing people use more video because of the economy and the need to travel less," Schwartz said.

ooVoo's business service costs $39.95 a month per person or less, depending on the number of users in a company, ad-free. The consumer service starts at no fee to as high as $17.95 a month for six-way chats. Voice calls to phones are extra.

In comparison, Skype, which had 443 million customers at the end of March, does not charge a fee for video chat between computers, but charges per-minute for calls to telephones.

Skype recently added the option of screen sharing, which allows users to share all or part of their screen, and says it does not charge for this service.

But Skype, which provides voice conferencing options for up to 25 people, only provides one-to-one video and does not offer the call recording feature that ooVoo has.

IDC analyst Rebecca Swensen said that ooVoo's ability to combine video and phone participants in the same call is a big plus for attracting business customers. She also noted that the option of setting up a Web video call with non-ooVoo users could help it attract new customers.

But she said Skype would likely be a formidable rival.

"They also are starting to focus heavily on the business market, which leads me to believe more features and functionality are on their way," Swensen said.

Howard Lichtman, president of consulting firm Human Productivity Lab, said that while large companies would be more likely to opt for a high-end telepresence system, many smaller companies would be content with a cheaper option.

"There's a kind of a virtuous cycle going on in that more and more companies are deploying video, so more and more people want to use it," he said. "A lot of little companies are saying, we'll just use Skype or WebEx or some of these other services."

(Reporting by Sinead Carew; Editing by Tim Dobbyn)