Pinger’s disruptive Textfree service is heading to Europe, and it’s doing it with the help of hottest buzzword around: gamification.

Pinger has managed to build a huge userbase in the United States by offering free text messaging without any major catches: users are given their own, real phone numbers, and they can send and receive text messages with any phone. And, most important — the app works on the iPod touch, which doesn’t otherwise have SMS functionality built-in. Pinger also launched a free voice calling service in December but lets users make free phone calls and earn minutes by completing basic offers. Pinger makes money off of these offers and by running ads in its mobile apps— to the tune of billions of impressions a month.

But the SMS situation in Europe makes international expansion a difficult affair. Cofounder Greg Woock explains that in the US, when a text message is exchanged both the sender and recipient ‘burn’ one of their texts — in other words, they’re both paying for it. Things are different in Europe, where only the sender pays for the text. The recipient pays nothing, but the carrier of the recipient does pay the sender’s carrier a few Euro cents. Yes, it’s a little confusing.

Woock says that this model doesn’t normally lend itself well to a free texting model, because Pinger could wind up owing carriers boatloads of cash if its users are receiving more texts than they’re sending. We’re talking many many millions of dollars owed if it could build a userbase as sizable as the one they have in the US.

But Pinger came up with as solution: it’s going to use game mechanics to ensure that users are sending and receiving the same number of text messages. That way Pinger will be paying European carriers the same amount the carriers are paying Pinger. The net result: Pinger can run a texting service that’s free of charge, and it can place ads on top of it through its mobile applications, the same way it has in the US. In theory Pinger could actually use the game mechanics to ensure users are sending more texts then they’re receiving, which would wind up with Pinger actually making money from the carriers.

The game mechanics themselves sound pretty straightforward: users are presented with a meter that’s at 100% when you’ve sent and received an equal number of text messages. If you send a message, that percentage drops a bit. Receive one, and it goes up. Pretty easy.

But what happens when you’ve dropped to 40% and are worried about being able to send more texts? The trick, Woock explains, is to tap into your social graph (he says the company consulted with Zygna for advice on this front). Textfree will prompt users to post updates to their Facebook News Feed inviting their friends to send them text messages, which in turn will boost their meter. I’d imagine this would be a little weird to see initially (“hey guys, please send me text messages!”) but no more so than a Zynga game that prompts you to ask your friend for helping watering some virtual plants.

I asked Woock how the European carriers felt about the model. He says that all of the carriers they’ve spoken too have been very supportive and see an opportunity for incremental revenue. And he adds that Pinger has applied for patents on the meter system that drives the equal flow of texting.

Pinger’s mobile app will be launching in a small test in Germany in the coming weeks (they want to make sure the model works). Assuming that goes well, it will be expanding throughout Europe in the near future.

Pinger’s Textfree, the app that lets users send and receive free text messages and phone calls using real phone numbers, has a new best friend: the big green Android robot.

We’ve been tracking Textfree’s staggering growth for some time now — CEO Greg Woock says that Textfree users now exchange 1.5 billion messages and 45 million voice minutes each month, making it one of the top 10 carriers in the US. And that usage has led to some big opportunities for advertising: he says they’re closing in on 2 billion monthly ad impressions.

Textfree rose to prominence on the iPhone, but the Pinger team released a version for Android as well in February. And now, just a few months later, Android users are signing up for Textfree at the same rate as iPhone users (this ignores iPod Touch users, who make up a big chunk of the user base, but it’s still very rapid growth).

Android users are currently sending 5.5 million messages a day (and they also send 2 million messages via Facebook chat, which is integrated into the app). Growth is doubling month over month across key metrics like the number of users and messages sent. And the Android version only supports free texting — it doesn’t have the free voice calls that launched on the iPhone in December, which makes the feat all the more impressive.

Woock also discussed how Pinger’s mobile phone number strategy has worked out for them. When you sign up for Textfree you’re given a unique, real cell phone number, which means you can send and receive text messages with anyone (i.e. they don’t need to have the app). And now that the app has been out for a while, there’s a trend emerging: teenagers who used Textfree on their iPod Touch as what is essentially a VoIP phone are now starting to transition over to ‘real’ Android phones, and they’re taking their Textfree number with them.

Finally, Woock says that the company will have more news on the way very soon, including new support for international users (he didn’t get into how that will work — but he says it’s “totally unique and dead simple”).

For those that haven’t used it, Textfree gives users a free, unique phone number which they can use to send and receive free text messages through the service’s mobile app. That’s nice on mobile phones (you don’t burn through your carrier SMS allotment), but it’s proven especially popular on the iPod Touch, which can’t typically send or receive text messages. Users are now exchanging over 1 billion text messages per month through the app (to give some context to that, in September Textfree had exchanged 3.5 billion messages cumulatively since its launch in March 2009).

But Textfree isn’t just for texting any more. In December, the application added support for free voice calls. This is especially important for those iPod Touch and iPad users, who typically can’t make or receive phone calls — Pinger says that 80% of calls are from non-phone devices. Users are allotted some free minutes for starters, and they can opt to ‘earn’ more minutes by completing Offers inside the app (these include offers incenting users to download other iPhone apps). Pinger says that 1 million voice minutes per day are being consumed on the app, and that 2 million minutes are ‘earned’ daily via these offers.

Textfree’s competitors include GOGII’s textPlus, which has 7.7 million active users and a bigger focus on groups and media sharing (and doesn’t offer voice calling).

The feature was in beta for around two and a half months (during which it was tested by thousands of people), and it went live for everyone on December 21. Today, Pinger is announcing just how well it’s done: between December 21 and December 30, users made 2.5 million voice calls. That’s a lot of talking.

On an average day, Textfree hands out somewhere on the order of 15,000 free phone numbers to its users (when you sign up for the service you get a new, unique phone number, which your friends can use to text and call you). Over this ten day holiday span, Textfree handed out some 900,000 phone numbers — 210,000 of which were distributed on Christmas day alone.

Some of this success can be attributed to the fact that Textfree made it to the number two spot overall on the App Store before it went into its ‘Christmas freeze’ from December 23 through 28, during which Apple ‘locks’ the app rankings in place. In other words, a lot of people who fired up their shiny new iPhones this Christmas saw Textfree as they first started browsing the App Store.

One other interesting stat: over this same time span, Pinger says that users bought or earned 20 million voice minutes. The ‘earn’ part is what’s novel here — Textfree lets you purchase cheap minutes just as you would on other VoIP apps like Skype. But it also lets you complete iPhone-specific ‘offers’ like those popularized on Facebook in order to earn these minutes. The most popular kind of offer simply requires users to download a promoted application from the App Store, which only takes a few seconds.

Pinger Chief of Product Joe Sipher says that rewarding users for downloading other applications has been “fantastic” and that the company has “made a ton of money” through it. He also says that many of the top 25 applications over the holidays were actually paying Pinger to appear as promoted applications in Textfree (these promotions are a good way to pad their download numbers).

Textfree has grown a lot since we last saw them at Disrupt. During the conference in September, Pinger announced that 4 billion messages had been sent using Textfree. That number is now up to 6 billion — the service has grown 50% in the last three months alone, when it took 1.5 years to get to the first 4 billion messages. Aside from the voice minutes detailed above, the app makes a lot of its revenue via ads — and it’s doing 60 million ad impressions a day. The app has been download over 10 million times overall.

One of the obvious competitors to Textfree is GOGII’s similarly named textPlus, which is adding 50,000 users a day. However, unlike Pinger’s Textfree, textPlus doesn’t have any voice functionality at all.

The votes have been tallied. The judges have weighed in. A battlefield of twenty-seven startups was whittled down to a final, elite group of seven. And now the winner has been chosen: Qwiki has taken the top prize at TechCrunch Disrupt San Francisco.

In addition to a $50,000 grand prize, the company has just been handed the Disrupt Cup, taking over possession from Disrupt NYC winner Soluto. Upon receiving the cup, CEO Doug Imbruce exclaimed, “Let’s change the world!”

Taking the runner-up spots are CloudFlare and Pinger, both of which were also very impressive.

Qwiki climbed above the rest by offering a new way to consume information: text, audio, video, and images melded together in a seamless interface, generating a dynamic movie of whatever you search for. It really does seem like something from the future, and it’s only going to get better.

Our backstage interview with Qwiki:

Make sure to check out our full coverage of each of these stellar companies:

• Qwiki Just May Be The Future Of Information Consumption. And It’s Here Now.
• CloudFlare Wants To Be A CDN For The Masses (And Takes Five Minutes To Set Up)
• Pinger Now Turns Your iPod Touch Into A Free Cell Phone

And while only one startup can claim rights to the Disrupt Cup at a time, this was an incredibly solid field of companies, and we want to reiterate that it was a very close race. Many of the companies that took part in the Startup Battlefield are going to be doing great things.

In addition to the Disrupt Cup, some special awards were also given:

Yume for Best Marketing Strategy – Checkpoints
Perkins Coie – CloudFlare
Greylock Partners Disruptive Product – Qwiki
Greylock Partners Business Model – Pinger
Omidyar Network – Sumazi
Microsoft BizSpark – Badgeville

Textfree will soon include a true SIP-based VOIP client that works over both 3G and Wifi. The feature is enabled by the fact that Pinger gives all of its users free, unique, real phone numbers (it distributed 1.7 million phone numbers last quarter; AT&T gave out 1.6 million in the same time span). Calling works as you’d expect: hit the call button, and you’ll see a dialpad — you’ll be able to place calls whenever you have a data connection. This is especially huge for iPod Touch users, who already comprise most of Textfree’s userbase and can now use their devices as phones.

The other big change the application brings is the introduction of Offers to Textfree. Before now the app has relied primarily on ads for monetization (it displays an average of three ads for every text sent, so it shows a lot of ads). Voice calling will be different though. Users will be allotted a certain number of free minutes every month. Use those up, and you can choose to either buy more using a credit card or you can complete Offers, which have been popularized by social games.

Offers generally entail doing something simple, like downloading the latest Tap Tap Revenge iPhone app. Other app publishers participate in the Offers program because it exposes their application to more users (and also helps them climb higher on the App Store leaderboard). Pinger gets paid every time someone completes an offer. And users get their free call minutes.

Pinger says this is only the beginning. The company wants to expand worldwide and disrupt the mobile industry even more than it already has by challenging the huge markups carriers have on both SMS and voice calls (and getting real phone numbers from other Internet services, like Sykpe).

Q&A:

MT: Video is going to be next-can you do that?

Pinger: If our customers want video, we’ll give them that. Right now, they don’t.

EW: How does the phone number integrated in the UI?

Pinger: The mobile phone # is the biggest social network in the world, need to make your # and your ID the same.

AN: People are spending a huge amount on SMS, this could work especially for young kids.

MT: If you are really going to disrupt this space, why not move away from a minute model?

Pinger: That’s good feedback.

Pinger: We using ads from Google, Apple, etc.

C: if it works as good as you say it is, I know a lot of people who would use this.

So how do the do it? The key, unsurprisingly, is ads. Textfree has gotten such massive distribution that it can now turn a profit by placing ads in the application (the company has been profitable since December). Textfree doesn’t insert ads into your conversations — rather, it shows basic display ads which get 1.4 billion ad impressions a month. The application has been downloaded 7 million times which gives you an idea of its reach, but it’s also extremely engaging: users open it an average of ten times a day.

Using Textfree isn’t quite as straightforward as ‘normal’ text messaging, but users don’t seem to mind. The service assigns each user a new telephone number, free of charge. From then on you can text as much as you’d like, and can receive inbound texts that are sent to this special Textfree number. This can obviously be slightly irritating if you already have a phone number (i.e. on an iPhone), but remember, there are millions of devices running iOS that don’t have phone service, namely the iPod Touch. And Textfree gives all of those users the ability to text as much as they’d like, provided they have a Wifi connection.

The iPod Touch has proven to be Textfree’s bread-and-butter — 70% of its users are on the device. And Pinger says that carriers actually like their service, because it turns all of these iPod Touch users into extra nodes — they may be sending free text messages, but they’re certainly going to be sending and receiving messages from users who are on traditional carriers.

Textfree originally launched last year as a premium application that would charge users $6 per year for unlimited texting. That proved to be quite popular, but Pinger found that it could do even better by shifting the app to a free model and relying exclusively on advertising to generate revenue.

Pinger has flown relatively under the radar for an app developer that has launched 14 apps that have all reached the top 100 iPhone apps in the App store. The startup’s Textfree app has surpassed more than 1 Billion text messages sent in less than 9 months. The app allows owners to send free text messages to any US mobile phone, including replies. The app has a free version which allows users 15 messages daily at no cost, and an unlimited version which is priced at $5.99 per year. Textfree has seen 5 million downloads since its launch last year.

Pinger also says it has achieved profitability though the startup won’t reveal actual revenue numbers. Pinger generates revenue through 4 main channels, including advertising within its apps, affiliate fees to Apple, in-app ads and purchases. And Pinger has more than 15 million downloads across all of its apps.

The numbers aren’t to shabby; but Pinger certainly is placing all its eggs in one basket by only developing iPhone apps. Other applications in the Pinger family include Doodle Buddy, Stickwars, and Picfree. Pinger’s Textfree faces competition from Textplus.

When I first started out in the real world in the mid-nineties voicemail was an important productivity tool. I remember people talking about the pros and cons of various enterprise voicemail systems – which had the best forwarding and group messaging, which allowed for archiving, and how many messages could be stored and for how long. Even though email was around, people were still unsure how to use it. Letters went on letterhead and were formal. Voicemail was informal and common. Email etiquette was still being developed. It was good for mass-forwarding jokes and moving Word, Excel, and Powerpoint files around, but it took a while for email to take over as older generations moved out of the workplace or got with the program.

But now an increasing number of people are just plain avoiding voicemail (for my impromptu and unscientific survey, see the comments here, which are predominantly anti-voicemail). It takes much longer to listen to a message than read it. And voicemail is usually outside of our typical workflow, making it hard to forward or reply to easily.

Typical voicemail messages today include things like “Please don’t leave me a voicemail, I rarely listen to them. Please just email me at xxxx@xxxx.com” Many people don’t bother setting up their voicemail accounts at all. Then there’s my favorite method, the one I use personally – let the message box get full and then don’t empty it. Caller ID still tells me who called, and I can simply call them back.

How many times have you called someone back and said “I saw that you called but didn’t listen to the voicemail yet, Is it anything urgent?”

Senders often feel guilty for leaving voicemails, too. And to make sure you get the message, quite often people will follow up with a text message – “Just left you a VM, it’s important” – just so you know it’s there.

There are startups that are trying to make voicemail more useful. Pinger, GrandCentral and YouMail are among them. The iPhone’s visual voicemail feature helps clean up the clutter, too. But at the end of the day you still need to take time to listen to those voicemails, and that usually comes after other equally urgent but less disruptive tasks.

The services that really make voicemail more usable are those that convert voicemail into text and then send it to you via email or SMS (Spinvox, PhoneTag Yap and Jott, for example).

More mobile carriers are offering text conversion for a monthly or per-message fee. It’s my guess this will become more and more common. Voice is here to stay as a data input method, but listening to messages will certainly become an increasing luxury, to be reserved for loved ones or those messages that aren’t transcribed properly (or you need to hear it for tone or emotion).

For now most people don’t have voicemail transcription services. So think before you voicemail, more and more people just find it annoying.

Pinger’s normal service is meant as an alternative to text messaging, letting users send voice messages to each other without ringing the recipients phone, waiting, or difficulty of typing while on the go. All a user has to do is call into their Pinger number, say the name of the recipient or recipients (for group messages), and leave a voice message in their Pinger mailbox. Pinger members are then notified of the message by text, prompting them to click through and listen to the message, to which they can immediately reply by another Pinger message.

Pinger is rumored to be backed by a total of $11 million including financing from Kleiner Perkins Caufield & Byers and DAG Ventures.

The DEMO conference is wrapping up here in San Diego and unlike when it began 16 years ago the conference wasn’t dominated by mobile launches. None the less, there were some very interesting mobile services here like ScanR and Realeyes3D image scanning by mobile photo, Flurry‘s simple email and RSS on Java phones and Grand Central (which I’ve written about at length).

3Jam and Pinger both launched multiperson SMS services at DEMO. Probably first popularized by Dodgeball, multiperson SMS is a feature (or a company – your call!) that quite a few people are coming out with all at once lately. The following are some short descriptions of eight companies offering multiperson SMS and a table displaying which services offer particular features.

The List

• Jyngle is a web based service that has voice support, just launched and got a review over on CrunchGear today.
• 3Jam is funded, relatively straight forward and launched here at DEMO.
• Pinger lets users quickly respond to messages by voice and received $3 million from Kleiner Perkins in 2005.
• Swarmteams does a whole lot of things, though we weren’t able to get it to work well in testing for our original review. You might have better luck, and if so then this Irish service could well be worth using.
• Loopt is a location aware service funded by YCombinator and Sequoia. We reviewed it at launch.
• Dodgeball is old school and was acquired by Google in 2005.
• Twitter is for groups of friends who want varying levels of instant, automatic updates on each others’ activities. It’s a product of podcasting company Odeo.
• Moblabber is a mobile social network that users can receive topical messages from automatically.

There are undoubtedly more companies that offer multi-person SMS, or at least there will be by the time I click publish on this post – but I hope that comparing these seven company’s by feature set will help flesh out a vision of the landscape and where we stand today.

The Features

This is a serious company with a dead simple, viral product in the mobile voice messaging space. Pinger, which was called Project Edgar at the time, raised $3 million from Kleiner Perkins in November 2005, and Kleiner partner Randy Komisar joined the board of directors.

The founders both came out of Handspring (Greg was VP Sales and Joe was VP Marketing) and also worked together at Virgin on a project that never launched.

There’s not much we can say yet about the product, but I will say that this is one of the few mobile applications that I’ve seen that I’ll use every day. And the private beta is more buttoned up than most non-beta services we’ve tested. More on this as soon as the company gives the green light. Sign up to be notified of launch on the Pinger home page.