By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
March 21, 2011 (March 22 on OBJ.ca)

Click here to view this article on OBJ.ca.

Fate of my1voice technology uncertain; MyFax and Campaigner to continue

More than 100 staff have been let go from Internet fax and communications services provider Protus’s local office since the Ottawa company announced its $213-million acquisition by Hollywood rival j2 Global Communications three months ago, a company official confirmed.

Steve Adams, Protus’s vice-president and general manager, said about 130 or 140 people are currently employed in the Ottawa operations. That’s down significantly from the 300-employee figure recorded in Protus’s latest Ottawa Technology magazine listing.

“When the initial announcement was made, there were layoffs, but that’s behind us now,” said Mr. Adams. “It’s a stable environment here and we’re hiring now; we have open positions in (customer) support and technical areas.”

The news adds detail to an e-mail acquired in early December, in which Protus’s then-CEO, Joseph Nour, wrote to employees that there would be an “immediate reduction” of overall head count.

Mr. Adams stressed that j2 has shown “real commitment” to the Ottawa area and to its e-mail marketing business Campaigner, which Protus acquired in 2008.

According to Mr. Adams, j2 is “keeping all the functions necessary” to run and support Campaigner in town – including sales, marketing, engineering and development, operations and customer support – although he confirmed the accounting department is migrating to j2’s California head office and there is no longer a legal team in Ottawa.

Meanwhile, the MyFax virtual faxing service – which brought in about 81 per cent of Protus’s total revenues in the 12 months leading to Oct. 31, 2010, compared to approximately 11 per cent for Campaigner – will also continue to survive.

“MyFax is a very strong product and a very strong brand, and j2 continues to invest in it and support it,” said Mr. Adams, who pointed out that j2 operates a number of brands in the Internet faxing space, including its own eFax offering.

MyFax and eFax were the subjects of a five-year battle between Protus and j2, with the latter accusing the local firm of infringing on its Internet faxing patents and of sending junk faxes to j2 customers.

Several other competitors in the fax-to-e-mail industry were also involved in j2 lawsuits, including San Francisco-based CallWave Inc. and Miami’s Venali Inc. However, CallWave settled its patent infringement lawsuit with j2 in 2007, with j2 buying its rival’s Internet fax assets in 2009. And like Protus, Venali was acquired by j2 in September 2010 as part of a buying spree that brought a total of eight companies under the j2 umbrella.

Despite the overlap between j2’s various e-faxing brands as a result of the acquisitions, j2 spokesperson Bill Threlkeld noted in an e-mail to OBJ that “MyFax will run as it always has from its Ottawa base” for the foreseeable future.

“Over time, components of the service may migrate to other j2 facilities for efficiency, just as some of j2’s other operations may migrate to Ottawa for efficiency,” he wrote, adding that Protus’s call centre in Ottawa has already begun to take calls for other j2 brands.

The one thing that remains uncertain is the fate of Protus’s my1voice virtual phone service, which Mr. Adams said is “not yet determined.” The business made up three per cent of Protus’s total sales at the time of the j2 acquisition.

“My1voice is important to j2 but … there is some product overlap,” he said.

Protus’s strong presence in the Ottawa tech scene and its second-place position in the Internet faxing industry made the company an attractive target for j2. MyFax reached 500,000 subscribers in 2010, although it trailed behind eFax’s 11 million users.

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THE ‘FAX’ ABOUT PROTUS

1997: Protus is founded.

May 2004: Protus introduces Internet-based virtual fax service.

August 2005: j2 Global Communications launches patent lawsuit against Protus.

February 2006: j2 accuses Protus and competitor Venali of sending unsolicited faxes to j2 customers.

2007-2009: Protus wins OBJ‘s Employees’ Choice Award, recognizing a high level of job satisfaction among staff.

December 2007: Protus announces that j2 patent suit has been dismissed with prejudice in the central district of California.

June 2008: Protus acquires Campaigner and launches my1voice virtual PBX phone service. j2 files another patent infringement lawsuit against Protus and two other companies in the eastern district of Texas.

February 2009: j2 acquires Callwave’s Internet fax assets.

April 2009: Protus named one of OBJ‘s Fastest Growing Companies.

February 2010: Protus announces it has defeated j2 patents in Europe and the United States.

September 2010: j2 buys Venali.

December 2010: Protus acquired by j2.