BT Buys Voice Software Startup

BT, short for British Telecommunications, has acquired Ribbit, a Silicon Valley startup that provides a platform for developers to build voice features into Web applications, for $105 million.

Through the acquisition of Ribbit, BT (NYSE: BT) hopes to stay ahead in the telecommunications industry, which it sees as increasingly defined by innovation in software, said J.P. Rangaswami, BT’s managing director of service design.

“In essence, we saw that we had an opportunity to raise the stakes in the global communications race against Google and Apple,” Rangaswami told, referring to Google’s forthcoming Android platform and Apple’s iPhone. “We’re going to have access to a platform that is proven to give us the room to innovate.”

The acquisition comes amid growing frustration at the slowness with which wireless carriers have opened their networks to third-party developers. Restricting support for devices and applications is widely seen as a drag on the still-nascent mobile advertising and commerce markets.

Ribbit began with the mission of creating an “agnostic” telephony platform that could extend to any device or network.

“What we’ve done is take the service that a phone company normally holds behind its walled garden — and many layers of security — and opened it up to people on the Internet,” Ribbit CEO Ted Griggs told

Ribbit collects a share of the revenue from developers who sell the applications they build on its platform. Ribbit software has powered popular voice tie-ins with software-as-service company (NYSE: CRM), social networking site Facebook and the iGoogle personal portal.

BT had already been courting developers before today’s acquisition. Thousands of developers have taken advantage of its software development kit to build applications on BT’s 21CN software platform, which the company describes on its Web site as the backbone for its “transformation into a global, software-driven communications business.”

But, Rangaswami explained, “We knew that we couldn’t do this alone.”

In addition to its base of developers, Ribbit brings to BT a technology called SmartSwitch. The software-based mechanism allows for voice to move across multiple modes of telephony, such as landlines, mobile phones, instant-messaging applications and the Voice over IP (VoIP) service Skype.

Ribbit will retain its brand, management and Mountain View, Calif., offices. With BT operating in 170 countries, Griggs hopes the acquisition will help Ribbit expand globally. The software maker debuted its first product at the DEMO product showcase in January.

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