Ashton Kutcher-backed startup Ooma is falling apart

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Owen Thomas

04/09/08 02:20PM

Filed to: deathwatch

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Hold the phone: Voice-over-Internet startup Ooma is flailing, despite — or perhaps because of — a viral-video marketing campaign directed by Hollywood star Ashton Kutcher. Ooma launched its product, a $400 device which offers unlimited phone calls, last year, with a splash of press. Starstruck tech bloggers like TechCrunch's Michael Arrington gave away Ooma gadgets to readers in exchange for some facetime with Kutcher — and asked few questions about its nonsensical business model, which had it charging high upfront prices for hardware and giving away phone service. Now, we're told, its high-school-dropout CEO, Andrew Frame, has seen a host of executives leave.

The departures include Yahoo veteran Tish Whitcraft, CFO Tom Cronan, and VP of communications Sarah Ross — though we're told Ross is still consulting for the company. Outcast PR, Ooma's agency, tells me it no longer represents the company; dropping a PR agency is usually the sign of a company whose cash is running short. No wonder: Ooma's phone device is overpriced and technically unimpressive.

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raincoaster Owen Thomas 04/09/08 10:50PM

Ooma gawd.

mhunter8 Owen Thomas 04/19/08 09:43AM

First of all, the reference that the phonegnome is identical in functionality isn't true. Ooma can completely replace your existing phone service, so you can eliminate the monthly billing. Feature for feature, phonegnome doesn't compare. I know, I've used both. Secondly, while $400 for a unit is pricey for a one time payment, it is exactly that - a one time payment. You can recover the upfront costs in less than 14 months - after that you're saving $$$. I've read articles droning on about how expensive ooma is and voip is getting cheaper every day, blah blah blah. Well the fact is, by the time I recoup my sunk costs (which will be January, 2009) it isn't going to be cheaper, and I will be ahead of the game. If you just do the math, it's a good deal and isn't over priced for what you get. Of course, I suppose if you have all your charge cards maxed out and are living from paycheck to paycheck and can't budget, it may be a problem. Finally, Ooma has a quite sizable initial infusion of cash, their infrastructure costs aren't the same as Vonage, Packet8, etc. so they can weather the storm for quite some time.

WagCurious Owen Thomas 04/09/08 03:58PM

@Lewis: $400 is a reasonable price for a phone that has wireless, internet and video capabilities... Oh wait, this a landline phone? You're kidding, right? Is it in the shape of a football or something? Do I get a magazine subscription with it?

SuprabhaNoppit Owen Thomas 07/31/08 10:55PM

Looks like there's some additional people leaving and layoffs at ooma. ooma has decided to terminate their entire in-house web development team as well as some other developers. The company continues to shrink at quite a rapid rate. They are no longer free home phone service and they're now charging $12.99/mo for their "premier" service? The lies and changes continue to come out of this company. Best of luck, they'll need all they can get. The call quality is great, but I liked the free part of it. If you're going to pay, go with a bigger more reliable home phone service.