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Gizmo "Friends and Family"

The details of Gizmo Project’s new All Calls Free program are out this morning, whereas last night when Andy Abramson posted his piece, they were offline.  This is MCI’s Friends and Family plan in the age of VoIP calling. Essentially, when you call someone else who is an active Gizmo user on any number that that person has registered with Gizmo, the call is free (in the countries where the plan is available).

But wait!  Aren’t Skype calls free (in North America) to all calling destinations?  Why not just keep using Skype?

Well, just like the old old world of MCI vs AT&T, the devil’s in the details of a calling plan.

During the current promotion, Skype is free… nada…. zilch… zip for all calls originating from accounts in the US and Canada and terminating in the US and Canada.  At iotum, Steve Lecomte and Julien Raynal, who spend lots of time on the phone, are using Skype for business calls.  Integrated with the Outlook Toolbar, it’s a natural, since most of our calls are North American.  On weekends in July, calls are also free to the UK, Japan, and Mexico — any phone.

Gizmo Project is free for calling, between Gizmo users, to any phone in Canada, China, Cyprus, Guam, Hong Kong, Malawi, Malaysia, Puerto Rico, Russia, Saipan, San Marino, Singapore, South Korea, Thailand, United States, US Virgin Islands, Vatican City.  In addition, you can make a call to any landline phone in these countries, provided that other user is also a Gizmo user: Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Chile, Croatia, Czech Republic, Denmark, Estonia, Finland, France, French Antilles, Germany, Gibraltar, Greece, Guadeloupe, Hungary, Iceland, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Panama, Peru, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, Taiwan, Turkey, United Kingdom, Venezuela, and Zambia.

If you primarily call North American numbers, for now Skype is a better offering. It’s really free. It may not always be, since free calling is supposed to be a promotion.  If you make lots of calls overseas, depending on where you call, Gizmo may be a better offering (if you can get your friends and family to sign up for it).  And, if you’re not North American, Gizmo gives you free calling to 60 countries (when you sign up the recipients of those calls as Gizmo users too), which Skype doesn’t.

Reading between the tea leaves leaves you with the impression that Gizmo has been hard hit by Skype’s free calling throughout North America promotion. Certainly I’ve used it less. However, because they’re not backed by EBay’s deep pockets, they’re looking for an offer that will accentuate the word of mouth growth of their service, without a dramatic impact to the pocket book.  The place where Skype is most vulnerable at the moment is internationally, where they haven’t extended the same offers that they have in North America.  Ergo, push there.

My take: it’s an interesting chess move, rather than a definitive strategy.  Here in North America, it’s simply easier for me to call the people I need to reach on Skype, than it is to convince those same people to buy a Gizmo account. Most of the time I don’t bother with Skype, even. In our home, we’ve spent about $30 between last October and March on long distance using a $.02 plan from NuFone.  On average, we use about 250 minutes per month of LD calling friends and family.  My monthly cost is $5 on NuFone, free on Skype, and would be $2.50 on Gizmo, assuming that I couldn’t get any of my friends or family to switch.  It’s not even two Starbucks latté’s. I’m not sure price is an issue any more.

{ 9 comments… add one }

  • Dario Salvelli July 20, 2006, 4:30 am

    Hi Alec,this is interesting. There is another software,read this post on my blog:

  • Alec July 20, 2006, 6:05 am

    Hi Dario,

    It turns out there are several. I've used a few myself. Thanks for letting me know about this one too!


  • Dario July 20, 2006, 5:46 pm

    Don’t worry. It’s the same company that has develop some other voip (voip stunt,voipcheap,voip buster) and make the same marketing for all voip. I add your blog on my day readers.

  • Jason Droege July 20, 2006, 7:05 pm

    Alec — as usual a very insightful post. We actually didn’t feel any pain as a result of the Skype announcement in US & Canada. Most of our business and usage is outside the US and our usage in the US is because we can work with office PBX’s, connect to Gtalk, etc.

    We’ve always believed that calls would go to free, so this is just another step in executing our vision. Calling rates get cheaper for us all the time, so the financial burden isn’t significant…similar to the cost of bandwidth back in the 90’s (maybe slightly more, but same idea).

  • Alec July 21, 2006, 12:26 am

    Cool! That’s good to hear Jason. Thanks for dropping by.

  • Moshe Maeir July 21, 2006, 1:20 am

    Just proves the point that companies like Vonage have nothing to offer!
    The name of the game is connectivity collaboration, ease of work…

    Termination costs are no longer an issue – ease of use is (Iotum…)

  • matti July 24, 2006, 10:12 pm

    Wait! If the other party also has to have Gizmo account, why would I not call them for free using Gizmo to Gizmo??? The free plan does not constitute a benefit here at all, does it?

    In essence, I could not call for example my grandparents (no PC there) or other elderly or computer challenged friends, business associates or family members using the free plan. I'd have to pay the Gizmo out rates to all countries. So the free plan does nothing for me here either.

    Gizmo can't be serious about advancing into business organizations by having individuals in oncies and twocies invite their business contacts to buy Gizmo. That will just never come up in a conversation. You can't go around telling people, to buy software as a prerequisite for you to call them. In normal business conversation, VoIP only comes up if the callee volunteers that "You can also call me using Skype or Gizmo" or whatever. The topic is never initiated by the caller.

    So it is still advantage:Skype. Or did I miss something?

  • Alec July 25, 2006, 7:33 am

    Matti — it’s useful in the scenario where you are trying to reach someone who is a gizmo subscriber, but not in front of the PC.

  • Roman December 18, 2006, 2:47 am

    Gizmo — is great project, I’m looking for this long time.

    I just need to call from Russia to Egypt. It’s very easy now!

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