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The media has made quite an event out of the entrance of voice portals to
the increasingly crowded market of e-commerce. However, the voice portal
puts a bit of a different spin on the standard dot-com retailers. These
companies don't really use the Internet at all, at least beyond the theft
of concept. Voice portals allow the consumer to "browse" for
information using the telephone instead of the computer. For those of us
who haven't yet jumped on the mobile data bandwagon (including myself --
my cell phone doesn't have a Web browser, and I can't trade stocks with my
PDA), these portals are a handy idea. However, there has been a bit of a
shake out, and they didn't exactly enter the market in the best of
financial times for high tech companies.
First, let me explain how a voice portal works by providing a few
examples. Originally the thought was to provide a phone number, sometimes
toll free, that would log the consumer into a voice network. From there
the consumer could access sports scores, stock quotes, make reservations,
and even shop -- all the things that make the Internet great. The concept
is very similar to the same way an online portal like Yahoo! or AOL works.
The best voice portal example I've seen that is still around is TellMe.
By dialing 1-800-555-8355, I can get information on just about anything I
might need while on the go. The idea was that the consumers would log on
to these services the same way they do on the regular Internet. My
favorite "useless" application is their blackjack program. The
TellMe dealer (an impersonation of Sean Connery) reads the hand and lets
you bet. You can't split or double down, but it's an amusing distraction
if you're stuck in an airport and are re-reading the newspaper for the
tenth time.
HOW DO YOU MAKE MONEY?
Of course the next logical question is, "Where does the money come
from?" This is a new question for many dot-coms, but we're used to
answering it in telecom. Originally voice portals were to garner their
revenues from either advertising or through a commission basis. In the
case of advertising, the consumer would hear a quick pitch for a product
while the system searched from the results to a query. In a nutshell,
people hate this! Overlooking an inoffensive banner ad is one thing, but
these ads actually waste time. The only way this will ever work is if the
user is offered the opportunity to buy something similar to what they are
getting information on. If a user is checking sports scores, they may be
offered tickets. Even then, listening to an ad is intrusive and annoying.
Next is the idea of a commission. If I am looking for a restaurant and
the voice portal gives me directions, or (even better) transfers me to the
host, then that restaurant would pay the voice portal a commission. Or if
I buy something over the phone, the portal takes a cut. This is a nifty
idea but a logistical impossibility. It may happen in the future, but the
technology to track and transfer calls just isn't there yet. This is also
based on the idea of getting businesses to subscribe and pay for listings.
Maybe this will happen in the future, but it won't happen today.
Some things are better left to the standard Internet. The idea is a bit
too broad for the medium. As an analyst I always comment on how we need to
keep things simple. Technology for its own sake is never a good idea and
this is a perfect example. This isn't to say voice portals are without
merit, they offer many extremely useful features. It's just that I don't
urgently need to buy an L.L. Bean sweater from my car phone.
WHERE DOES THIS LEAVE VOICE PORTALS?
These companies offer some great features that just need a home... and
they are finding them. By offering voice portal services as an additional
value to existing customers, these applications are proving to be
extremely useful. Wireless companies are beginning to offer voice browsing
either as a free, or paid, service to their customers. It increases
airtime, reduces churn, and is a perfect bundle for their current
subscribers. BeVocal, one of the voice portal pioneers, offers a suite of
services tailor- made for service providers. Additionally, Web portals are
finding that a voice interface makes sense. AOL acquired Quack.com in
August of last year to provide "AOL by Phone," a service that
allows AOL subscribers, for a fee, to access e-mail and other personal
services via the telephone. I expect to see more of these types of
acquisitions in the future.
Voice portals offer great services, but only in particular situations.
There is a need for consumer voice portals and one or two will likely
emerge as winners after another year of shakeouts. However, there is a
large market for service provider and business voice portals, and the
technology to deliver them is just getting better.
Brian Strachman is senior analyst, Voice and Data Communications,
Cahners In-Stat Group. To correspond with the author, please send your
comments to brians@instat.com.
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