Google Buys Skype Rival, May Revolutionize Phone Industry

Dennis Faas's picture

According to TechCrunch, Google is reported to have paid $30 million for Internet phone call company Gizmo5. It could be a major boost for Google Voice, but may also raise further interest among regulators. (Source:

Google Voice lets users hook up a single phone number that can receive calls. When they get a call on that number, a user can have multiple phones ring, such as home, work and cellphones. The service also includes features such as voicemail transcription, meaning the user can search for words in their messages in the same way as with emails.

The firm also offers Google Talk, a service which lets computer users make free voice or webcam calls to other Internet users. However, it doesn't currently allow users to directly dial a telephone number; instead they must contact somebody by user name, which of course means that the person they call must also be registered for Google Talk.

Gizmo An Ideal Solution

The purchase of Gizmo5, which produced computer voice call technology similar to that of the better known Skype, means that Google could bring the Voice and Talk services together into a single package. (Source:

In theory, means somebody using an Internet-connected computer could make a call to any telephone in the world without paying a long-distance charge. In practice, Google would more likely either make a subscription charge, have per-call charges for calls to overseas numbers, or offer free services accompanied by advertising. (Source:

It's even possible the service will display ads on the screen matching the content of the user's conversation, though this would almost certainly appear too creepy for customers.

Regulatory Eyebrows Likely to be Raised

The purchase of Gizmo5 could add fuel to an ongoing debate about how Google should be regulated. The firm has already had a run-in with Apple, which rejected a Google Voice app from distribution to iPhone users; no official reason has yet been confirmed, though many have assumed AT&T would not have been happy with iPhone users being able to get cheap calls elsewhere.

Meanwhile, the Federal Communications Commission is investigating claims that Google has unfairly blocked its Voice users from making calls to certain rural locations. Traditional phone operators are not allowed to block such calls and say Google should play by the same rules.

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