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Watch Out Skype - Tango Adds PC Product

Photo courtesy of Tango

Within the first ten days of launching one year ago, the mobile video phone service Tango had one million users. As it celebrated its first anniversary last Friday, the Palo Alto-based startup counted 23 million registered subscribers to its free service, all of them using the company’s mobile apps.

Now Tango has added a PC product as well, and Microsoft is promoting Tango on its W-7 Mango platform. People can call each other from PCs, iPhones, the iPod touch, the iPad, and hundreds of Android phones and tablets.

The move to embrace the PC market would seem to be a direct swipe at Skype, the giant Internet phone service. Recently purchased by Microsoft, Skype has had trouble adapting to the mobile market, an opportunity that has been the central focus of Tango’s efforts.

“We are a communication services company and we are mobile first,” says co-founder and CTO Eric Setton. “But we initially underestimated the demand for video calls over the PC.”

One reason, Setton says, is generational. Whereas younger and more tech-savvy consumers have embraced smartphones and tablets, many people these early adapters communicate with, like their parents and grandparents, rely on computers, not mobile devices. Plus, there are still a lot more PCs in use than smart phones, although that balance is likely to shift over time.

One factor behind Tango’s growth is how easy it is to use. Unlike Skype and similar services, you don’t need to log-in, sign up with an email address, or create a user name. All you need is your phone number, which is your identity. Embedded in your phone is your contact list, and anyone on that list you specify can be added as a video call contact.

“Those you want to make a video call with are typically a small subset of that list,” notes Setton. “Within 15 seconds of downloading our app, subscribers can be talking to one another.” The user determines who is an authorized video phone contact.

"We are very careful of our subscribers' privacy," says Setton.  "Trust is everything. After all, these are private moments between grandparents, kids, spouses, and it's really important to respect that."

Roughly half of Tango users are in the U.S.; the rest are overseas in approximately 190 countries, though primarily concentrated where smartphones have established a presence. The company saw a large spike in usage in Japan, for example, following the tsunami-earthquake-nuclear disaster earlier this year.

Much of what makes Tango perform better than other video services is under the hood, involving technical challenges like video compression and p2p video streaming.

“The challenge with 3G networks,” explains Setton, “is the ‘up and down’ quality of the signal varies greatly. It operates like an artery and can get clogged as you move into and out of cells. If we send too much video we clog the networks, which is not good. So we've developed a number of techniques that allow us to sense the width of the stream we have to fit through and vary it as needed.”

The company, which is well-funded by blue-chip investors, currently employs 85 people, ten of whom are in Beijing. Tango is available in the App Store and Android Market, or as a free download for PCs.