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Google Out to Trump Skype in the VoIP Arena

Posted by in Industry News

Google have been successful in the bid to buy the VoIP (voice over Internet Protocol) technology that has made Skype a major international hit. This technology, called Gizmo5, is the link in the chain that connects users with the appropriate software enabling them to hold voice conversations via the Internet. This has left Skype open to being toppled from the top of the totem of VoIP players and given Google an ace to play with in this field.

The Gizmo5 technology was developed by Michael Robertson who is most famous for his controversial free music site, MP3.com, during the dotcom boom. eBay bought Skype in 2005 and left the ownership of Gizmo5 with Joltid Ltd, the company formed by Skype’s founders, Niklas Zennstrom and Janus Friss. Recently, eBay lost the legal battle to the buy rights to this technology in an attempt to ensure its exclusivity. This opened the door and gave Google the opportunity to swoop in and claim the prize, Gizmo 5. The price paid for Gizmo5 is reportedly in the area of $30 million.

Google’s interest in Gizmo5 lies with Google Voice, a new tool which is currently in testing phase. Google Voice allows a user to have one number for multiple phones and has customisable functions such as call diversion, custom greetings for voicemail, voicemail transcription, call screening and much more. Initially this service was limited, whereby users were unable to make calls to normal phone lines, now with the purchase of Gizmo5, Google will now be able to compete with Skype in the offering of a fully functional online phone service. There is speculation as to how exactly Google will integrate Gizmo5 with their technologies but some guess that it will evolve into a new version of Google Talk, a voice and video chat application which supports Google Voice.

Search Engine Land’s Greg Sterling noted that he uses Skype on an iPod Touch as a phone and spends $2.95 per month to make unlimited calls in the U.S. and Canada. He added:

“Expect a similar suite of calling plans and services to roll out from Google Voice, making the traditional telcos quite grumpy. Arguably Google has the capacity to popularize VoIP calling across networks in ways that even Skype cannot. Previously the Google Voice service required an underlying account and telephone number from a traditional telco. Now it doesn’t need one. When Google Voice originally launched, we asked whether Google Voice was going to become a “Next-Generation Telco?” The answer now is definitively ‘yes.'”

Taken from EWeek article you can view here

Google Voice was an acquisition by Google in 2007 of a company called GrandCentral who offered similar services. In more recent news, eBay has sold its majority share in Skype to a group of investors that include venture capital firm Horowitz group, Silver Lake and Joltid Ltd (original Skype founding company).

There has been much interest in this technology, dating back to 2005. Click here to see another post about this topic from a previous post on the E-Web Blog.

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