iTalk: Managing the Virtual E-Business

Abstract

iTalk was founded in January 1999 and one year later successfully launched a free voicemail service across the entire U.S. The service was made possible by the development of proprietary software that interfaced iTalk’s Web and phone servers with the switched networks of the established U.S. telephone companies. iTalk immediately experienced phenomenal Web site traffic, rivaling established telecom providers such as AT&T. Although initially successful, iTalk later foundered in its efforts to generate revenues with services that customers would be willing to buy. Technical problems delayed deployment of new services, and relationships between iTalk’s engineers and operations personnel became strained. Facing these and other problems in the summer of 2001, iTalk was not in a strong position to go public or to raise additional funds from private investors. Worse, iTalk had become potential prey for takeover attempts.