Online Gambling: Something Worth Chatting About?

16 April 2001
Ezenia, a Massachusetts-based, NASDAQ-traded company, has evolved from its origins as a video-conferencing software supplier and developer into a voice-enabled Web-based chat service and its hoping that the online gambling industry can help it change the way the Internet is used by consumers.

The company offers a server equipped with the technology to turn any website into a voice-enabled chatroom. The concept is still a rather new one for the Web industry, but officials with the group say they're starting to see it attract interest.

Art Souza, vice president of worldwide marketing for Ezenia, says that once a website operator has the server, it can seamlessly merge the option into its site.

Souza used an online gaming example to describe the system. Many Web-based online casinos offer their games through pop-up Java windows which users click to download. "An operator could set it up so when you go into the blackjack Java window you also launch a voice chat session," he explained. "The people who are a part of that game can then talk to each other live."

This gives site operators a great deal of freedom in implementing the system on their sites.

"The system has a set of developer interfaces so the operators can tie it into their website any way they want to," Souza said.

Ezenia was founded in 1991, and after dominating the video conferencing market, its founders realized that they had to undergo a change to keep profits up.

"We have about 70 percent of the video conference market," Souza said. "But that market as a whole has been kind of flat for the last few years."

Using the groundwork laid on the video end of things, Ezenia used the same concepts for the voice-enabled chat.

"We started to look at how we could use our technology to grow the business in other areas," he said. "One thing that we have done is scaled the technology in such a way that you don’t have to go to special video conferencing rooms.

From your desktop PC you can connect and communicate with large groups of people."

Souza explained that there is plenty of one-to-one video and audio software available to users, but if more than two users are involved the options are limited.

"If you and I wanted to talk to each other, we could do that with any video conferencing system out there," he said. "But, if we wanted to bring another person into the meeting you would have to go to one of our systems."

The technology can be used within an organization and its internal Intranet or on the Internet.

Souza says that whether Ezenia will focus on the B2B market or the B2C market is still up in the air.

"We are still trying to feel it out," he said. "The Web world has been kind of going through a crash over the last six months. But we see both of them being long-term growth markets for us."

Enter the online gaming industry.

Souza admits that some operators have come forward, but the talks have all been preliminary.

"We have had a few operators talk to us, but it's really a sector that hasn’t taken advantage of the technology yet," he said. "We have some multi-player video game operators, but not online gaming sites."

Most website operators are not used to offering such options on their site, forcing Souza and his colleagues to sell a new idea.

"It is a new market," he said. "We are in the evangelizing mode. When we designed the product we wanted it to be as simple as possible to use."

Having set the foundation in place for the audio-only system with its video technology, Ezenia took the advanced testing phase slowly.

"It is based on the same core technology we have been providing for a longtime, so we were able to do it pretty quickly," Souza said. "What we did do was have a very long beta cycle because the characteristics of the users are very different from the video conferencing world."

Although the basic technology is similar with video and audio conferencing, the demands are much higher once you take a system to the Web, according to Souza.

"In video conferencing you might have four meetings in a day," he said. "But on the Internet you are going to have people clicking into a chat room all day long. The stresses and user characteristics are very different."

While site operators have a great deal of freedom in implementing the system on their site, users are not required to have any add-on systems or software on their computers.

"For the end user, the people at home, there is no Ezenia software that they need to install," Souza said. "We use Microsoft NetMeeting as a client and most people have that on their computers they just don’t know it is there and never use it."

How involved users get with the program will dictate whether they want to add any peripherals to their system.

"You can use the program with speakers and a microphone that most computers come with," he said. "If you like voice chat and want to do a lot of it you can go and invest in a $10 headset and you will get much better quality."

Operators may not be familiar with the idea of adding a voice recognition option to their site, but Souza says the Ezenia software doesn’t interfere with a site’s branding efforts.

"One of the things that we thought was really important was operators don’t want to have some Ezenia thing sitting on top of all their branding on the site," he said. "The use of the program is very transparent. If you have brand integrity and brand identity we don’t disrupt any of that. We can turn any website into voice-chat community without overtaking the site and messing up the brand equity."

Video usage was intentionally left out of the voice-chat product in order to make the system user friendly for even archaic PC users.

"We wanted to have a product that people can use today," he said. "Audio-only take up about 7 kilobits of data, so you can use this product on a 28K modem."

By keeping it audio only, users aren’t required to have special modems.

"Once you introduce video then you get into the questions about broadband or cable and DSL modems," he said. "We wanted a product people could implement today so we are highlighting the voice-chat only right now."

Modem limitations may not prevent users from taking advantage of the system, but Souza admits that as more traffic logs on, more stress is added to the software, something Ezenia plans on changing as the program evolves.

"The system has some physical limits, but it is part of our plan to scale that up over time," he said. "Most times chatrooms form like natural conversations form. If you go to a party you don't have 25 people all trying to have a conversation. You have groups of five or six people having their own conversations. Online chatrooms work the same way."

Ezenia technology does lend itself to long-distance phone call alternatives, but Souza said there are plenty of other firms who can explore that arena. Ezenia will focus on audio conferencing, but Souza does see the entire sector changing the way the Internet is used.

"This definitely is a movement," he said. "Over the next five to 10 years I think you will see more voice traffic happen over the public Internet. Our product does do one-to-one, but the specialty and the value of the product is that we can bring groups of users together."