Telefonica Digital Buys Video Chat Platform TokBox, An Airtime For The Rest Of Us

Telefonica Digital, the new media arm of the giant Spanish carrier Telefonica, has made another big investment in its bid to become an international communications platform extending beyond basic voice and data services. Today, it announced that it would buy TokBox, a video calling platform that works across websites and mobile apps through a series of APIs that is currently used by 50,000 developers. Financial terms of the deal were not disclosed, but both sides are apparently pleased enough with the deal. To date, Tokbox has raised $26 million from investors such as Sequoia, Bain and DAG.

The deal adds another arrow to Telefonica Digital’s quiver of services that it can offer out to developers through its BlueVia API platform: these already include voice, messaging and billing APIs. Earlier this month, Telefonica added Telenor as the first non-Telefonica carrier on to the platform to also benefit from those APIs, starting with carrier billing. This means that developers who use these APIs can then offer the services in apps across Telefonica’s 311-million subscriber footprint, and potentially to 460 million customers, with Telenor added into the mix.

And that number is set to grow: Telefonica tells me there are more carriers coming to the BlueVia platform soon.

Telefonica Digital is also looking at better ways of leveraging all the data it is amassing about its users, with the launch of its big data product, Dynamic Insights.

TokBox is based in San Francisco, where it, its 35 employees and CEO Ian Small will remain — meaning that, in addition to giving Telefonica another video component in its portfolio of services, the acquisition gives Telefonica a further foothold in the all-important region of Silicon Valley, an essential place for Telefonica to be as it tries to reposition itself as more of a “tech” company and less of a big, boring, old, European telco.

TokBox itself has had a rollercoaster past: starting out in 2008, it was arguably ahead of its time in pushing video chat services — although products like Skype, Google Talk, Airtime, FaceTime and more have definitely taken the baton and run with it (some not so successfully, it seems). In 2009, it laid off 30% of its staff, and in 2011 it shuttered its consumer-facing service, which had 2 million users, to focus on API development. It had actually launched the APIs back in 2010 and it already counts several recognizable brands among those that have used them — they include American Idol, Ford and Diet Coke.

Now, Telefonica Digital will try to upsell TokBox’s existing 50,000 users to its other services, get users of its existing BlueVia APIs to incorporate video chat, and potentially attract new developers into the mix at the same time.

I was once told by Mikkel Svane, the CEO of Zendesk, that a tech company today without a set of APIs, or a roadmap to offering them, is a company dead in the water. I agree, so I think this is definitely the right move for Telefonica. The jury is still out, however, on whether the big fish that is the wider tech industry will bite.

Release below.

Telefónica Digital Acquires Video Platform LeaderTokBox

Extends digital communications suite with face-to-face online and mobile video capabilities

25 October 2012 – Telefónica Digital today announced its acquisition of TokBox, the leading video communications platform.  The acquisition of TokBox, based in San Francisco, builds on Telefónica Digital’s strategy of driving innovation in its core business of communications, with capabilities that will now extend beyond voice and messaging to live video.

TokBox’s OpenTok Video Platform enables the rapid development of live video-based communications services through the simple addition of video calling into websites and mobile applications.

Telefónica will leverage TokBox’s Platform to enhance the communication services it offers business and consumer customers, adding cross-platform Web-based video communications to its existing voice and messaging capabilities. This will be offered both directly via tailored solutions and through the provision of APIs and applications so businesses and developers can produce their own services. Telefónica and TokBox will work to incorporate video APIs into the BlueVia platform, creating a unified video, voice and text API service with global reach.

Matthew Key, CEO of Telefónica Digital said,“Telefónica is all about empowering our customers through new and innovative digital services. By adding TokBox’s unique capabilities to our communications portfolio, we will allow our customers to leverage the full potential of web-based video communications in their own business models.”

TokBox launched the OpenTok Video Platform in November 2010 with companies such as American Idol, Ford and Diet Coke having used its technology. It has also delivered significant technology innovation, being the first to add video chat to any iOS application and pioneering WebRTC-based video solutions. WebRTC is critical to the future growth of web-based video communications, allowing for video calling to simply and easily be conducted via a web browser without the need to install plug-ins.

“Despite all our progress to date we are still in the early stages of the industry and this is a very exciting opportunity to accelerate the development of the OpenTok platform and rapidly expand its global reach and presence,” said Ian Small, CEO of TokBox. “Integrating our video capabilities with Telefónica existing voice and text offering creates an advanced real time communications suite for Telefónica’s hundreds of millions of customers around the world.”

“Congratulations to Ian and his team for building a platform that captured the hearts of customers and the minds of developers.” said Roelof Botha, Partner at Sequoia Capital and TokBox Board Director. “This is a strong fit for Telefónica’scommunications suite and will make it even easier for hundreds of millions of people to connect and collaborate.”

Ian Small will remain as CEO of TokBox and Carlos Domingo, Director of Product Development & Innovation at Telefónica Digital,will join the TokBox Board of Directors and become Chairman of the company. The acquisition was led by Telefónica Digital’s Silicon Valley-based venture investment team.