“The real money is in the ASPs,” says
Yankee Group analyst Megan Gurley. “The e-
commerce and advertising revenue will be
chump change.”^12 Eventually, Tellme plans to
offer ecommerce as well, which would allow
users to order items and services from e-tail-
ers such as Amazon.com using just a tele-
phone. The idea is that Tellme would take a
cut of every order placed using its service.
“It’s about hearing a song on the radio, and
being able to call Tellme and buy it,” McCue
says.^13
After its most recent round of financing,
Tellme recently began emphasizing profes-
sional services for building phone sites and
providing other voice-enabling services to
businesses. The company receives a profes-
sional services fee for developing the cus-
tomized site and per minute hosting charges.
In the industry, this is known as the “net-
work business.” Tellme offers businesses
a technology called Tellme Studio
(studio.tellme.com) that is free and offers
extensive tools necessary to get a simple
phone site up and running using a Web
browser and an ordinary phone. Since
Tellme Studio uses familiar Internet stan-
dards such as HTML, HTTP, JavaScript and
SSL, companies can use their existing Web
sites and Web technologies to build their
phone sites. Once the phone sites are built,
Tellme offers additional services, for a fee, to
further improve these sites.
“This is all about recreating the Web phe-
nomenon on the telephone network,” says
McCue. “By bringing the Internet’s open
standards to the phone, we expect to see the
creation of thousands of compelling phone
sites linked together to form a ‘phone Web’
that can be used by nearly anyone, any-
where.”^14
OVERVIEW OF THE VOICE
PORTAL MARKET
Voice portals allow callers to use toll-free
numbers to access the Internet from a tele-
phone without an Internet connection. (See
Exhibit 4 for an illustration of how a voice
portal works.) Forrester Research estimates
that voice-driven e-commerce could reach
and exceed $450 billion in revenue by 2003,
which is three times the projected revenue for
online retailing.^15 Market research firm
Kelsey Group projects that more than 18 mil-
lion U.S. consumers will use a voice portal
service by 2005.^16
While mobile professionals are the likely
target market for voice portals, other poten-
tial customers include commuters needing
traffic updates, consumers wanting local
information via audible yellow pages, dis-
abled individuals who cannot utilize a key-
board but can access information audibly,
and the estimated 55 percent of U.S. homes
still without Internet access.
17
Existing Web portals expect voice portals
to be popular with regular Web users, who
would hopefully log on more often if they
could do so using their cell phones. They also
anticipate tapping a vast and entirely new
audience of users who do not own PCs,
which amounts to about half of all U.S.
households.COMPETITION
Tellme faces roughly 30 to 35 start-up com-
petitors in the voice portal market. Many
players in this market are focusing on distinct
services, such as providing driving directions
or reading the user’s e-mail out loud, or on
specific markets, such as those outside of the
United States, as a means of differentiation.
There are four types of competitors plus
the potential competition from telecoms.
These are:^18- Voice portals of the directory type
- Voice ASPs which are transaction based
- Speech recognition software providers
- WAP services that run the mobile inter-
net
While competition among voice portal
start-ups is already intense, established tech-
nology and Internet companies have also
started to get in the mix. America Online
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