The magicJack itself is about the size of a matchbox.
Borislow plans to make money by selling advertising, which will be displayed as part of the software that runs while magicJack is plugged in. "It'll eventually become more of a portal," he says of the software interface.
The company also reserves the right to monitor the numbers dialed to tailor those ads, which some critics find creepy. Rob Beschizza at BoingBoing called it "systematic privacy invasion."
Borislow responds that targeting ads based on user information is no worse than what Google does in tailoring ads based on Web searches or the content of E-mails in its Gmail system. "We'll be doing what other people do in Web advertising," he says, promising to protect user privacy. His software robots won't monitor the content of phone calls themselves. "I'm not going to do anything to piss off my customers."
Borislow, meanwhile, doesn't rule out selling his new company if the right offer comes along. But he also talks as if magicJack could soon rank among the big telecom companies. Nobody has offered a consumer broadband device that operates across its own phone network, he says: "This is a disruptive technology."
Analysts are skeptical. There will be niches for startups, but the telcos and cablecos have too much advantage in owning the wires that deliver broadband to the home, says Paul Brodsky, an analyst at TeleGeography. He says the days have come and gone when independent VoIP companies could disrupt the telecom market.
Once in the home with an IP network, the incumbent companies can deliver phone service for little cost. "Once you have an IP network, it really doesn't cost anything to run voice over it," says Arnold, the independent analyst. "It's a race to zero."
With a multimillion wager on his latest tech horse, that's a race Borislow is willing to run.
Clarified on 6/6/08: An earlier version of this article included a quote from analyst Paul Brodsky that is now paraphrased.
Sheila Madison of AL @ Nov 19, 2009 16:20:22 PM
Kenny Canuck @ Nov 17, 2009 20:05:09 PM
Cathy of CA @ Nov 16, 2009 16:11:27 PM