Jaxtr free call service jumps tenfold to 5 million

LONDON Dec 11 (Reuters) - Jaxtr Inc, which allows mobile phone users to bypass international call charges by using the Web, has signed up more than 5 million members and is hiring a Silicon Valley veteran to help keep pace with the growth.

Chief Executive Konstantin Guericke his company has seen membership increase tenfold in the past 140 days from 500,000, a growth surge once seen for Web phenomena like calling service Skype or instant message network ICQ.

In response, Jaxtr is hiring Taneli Otala as its vice president of engineering. He is a former technology chief at Various Inc, owner of the sex match-making site AdultFriendFinder.com that boasts 24 million members.

The Finnish database expert was previously chief technology officer at MySQL, whose database software runs many of the most heavily trafficked sites on the Web.

"We've had some system challenges keeping the servers running that make the phone calls go through," Guericke said. "(Taneli) is one of the few people who can handle our growth."

Jaxtr's service connects both fixed-line and mobile phones over the Web using e-mail addresses to identify callers. With just 20 employees, the company is one of more than a dozen start-ups seeking to build on the success of market pioneer Skype, owned by online auction leader eBay Inc (EBAY.O).

But while Skype mainly lets users make free overseas phone calls via their computers, new Voice over Internet Protocol (VOIP) services allow both callers and recipients to use normal phones to converse.

Jaxtr also lets users pick up the phone and dial a local number to reach friends or family overseas, without having to return regularly to the computer to manage their account.

Rivals include Jajah Mobile Web, which pioneered the newer "click to call" services, and Jangl Inc, which allows phone users to send free text messages via its calling service and has partnerships with dating and social networking sites.

Asia accounts for more than 50 percent of Jaxtr users. In the first few months the site caught on among Indian callers, which accounted for 40 percent of the base.

India remains Jaxtr's largest market, but now represents just 10 percent of its fast-growing base, followed by the United States and Britain.

The service is concentrated in English-speaking countries because it has yet to be localized into other languages, Guericke said. Other countries where the service has caught on include Canada, Australia, Sweden, Pakistan and Egypt. It has recently spread to Malaysia and to Central and South America.

In August, Jaxtr received $10 million in funding led by Silicon Valley venture firm August Capital and three of Skype's early investors -- Draper Richards, Draper Fisher Jurvetson and Mangrove Capital Partners.

IDC analyst Will Stofega said the appeal of such Web-based calling is not only the low cost but also the ability to offer services that go beyond the uses of conventional phones.

Companies like Jaxtr are seeking to add premium services. Earlier this year, Google Inc (GOOG.O) acquired GrandCentral, which offers a similar service but focuses on enabling a wide variety of business calling features.

"You need something like convenience or low cost to build your base while you create the neat stuff," Stofega said.