Women’s Soccer League Hangs up on Borislow, MagicJack

November 1, 2011

Whenever Dan Borislow decides to write an autobiography, we’ll be first in line to buy the book — because his trek through life never ceases to be interesting. The enigmatic founder of the Voice over IP gizmo known as the MagicJack has now been kicked out of the women’s professional soccer league for, according to the league, an inability to play by the rules. Sound anything like the MagicJack we know in telecom?

In case you didn’t know it, Borislow bought a women’s soccer team and now uses its players like well known star Abby Wambach to promote the MagicJack. Here’s the Miami Herald coverage of the announcement. Here’s a good lengthy post from the sports blog Deadspin, which explains why the league may have taken its actions; and here’s a Palm Beach Post story that seems to believe that MagicJack is a reputable business even though the claims of $100 million in revenue seem mostly a figment of Borislow’s imagination.

We have a standing offer for Mr. Borislow to call and explain things MagicJack and soccer in greater detail… but I wouldn’t hold your breath waiting for him to answer. Even over a MagicJack link.

MagicJack’s VoIP Scheme Slammed by AT&T, FCC

April 11, 2011

Hat tip to our old pal Andy Abramson for tracking a legal development in the VoIP world — seems like the factually elusive Daniel Borislow got his MagicJack VoIP scheme slammed by AT&T and the FCC. Andy’s post has a thorough explanation of the beef, which we will try to distill further — basically it appears that Dan was trying to subsidize the “low-cost” MagicJack plan by billing AT&T and other large carriers for completing calls, a la the old Iowa-based Free Conferencing dodges of the near past.

It was interesting to see that the FCC didn’t rule that MagicJack’s plan was illegal, immoral or unlawful — it simply agreed with AT&T that MagicJack had tried to fudge the way it described its service and that error meant that MagicJack can’t charge AT&T the fees it is claiming. What that means for us MagicJack and Borislow fans is that the Dan show probably ain’t over yet, though as we stated before you have to wonder how people can continue to put good money into a stock of a company that calls something like this a financial release.

While we are waiting to hear back from Dan (who sometimes responds to our emails, but sometimes not) anyone seen the heralded magicjack Plus or the hinted-at femtojack, which less cynical “news reporters” apparently expect to hit the streets any day now? C’mon Dan, can we at least see if one of your promises comes true?

UPDATE: Dan Borislow apparently replied to a blog post by Forbes’ Eric Savitz on this subject. You have to click to open the comments but our man Dan is in a fighting mood… as he says (we have every reason to believe it is really Dan posting) about AT&T, “We are owed the money, we suplied [sic] a valuable service and when AT&T tried to strongarm us, we told them where to go.” Read the blog post for more.

MagicJack Gets its ‘IPO’ — by Merging with VocalTec

July 19, 2010

I’ll leave it to those who have more time to spend with SEC documents than I do right now to sort out all the details, but the initial public offering hinted at by MagicJack founder Dan Borislow last summer has sort-of come to pass, with the announcement of a merger between MagicJack’s parent company and VoIP gear supplier VocalTec, which trades on the public markets.

As befits a Borislow operation, there’s a whole lot of murkiness and mess involved — gotta love the line from the SEC filing that flashes a big red light over any and all proceedings, mainly to do with the fact that VocalTec isn’t a U.S.-based company so doesn’t necessarily have to play by NASDAQ rules. From the merger SEC filing, we quote:

We are a “foreign private issuer” and you will receive less information than you would about us from a domestic U.S. corporation. In addition, we have opted out of certain Nasdaq Marketplace listing requirements.

With the caveats out of the way, what else is interesting about MagicJack? According to the fiscal numbers, MagicJack did indeed have a $100 million revenue year in 2009 as Borislow predicted when we talked to him last — it was actually $117.8 million in revenue according to the document — but the company also incurred a loss of $22 million for the year, mainly due to huge costs like those of the MagicJack devices sold ($23.4 million), advertising ($32.1 million), network and carrier charges ($25.6 million) and $41.8 million in “General and administrative” charges, which seem quite high for a smallish startup of MagicJack’s nature.

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