Google's Dollar Deluge Destined for VoIP and Messaging

24 August 2005

Google's billion dollar gameplan, the subject of intense speculation after Monday's revelation it had launched a $4 billion (€3.29bn; £2.23bn) stock selloff [WAMN:22-Aug -05], has been revealed.

The cool-dude-turned-hungry-Moloch announced early Wednesday it is to buy its way into instant messaging and internet telephony - a bold and potentially costly challenge to the global telecoms industry, as well as internet rivals, Yahoo, AOL and MSN.

Branded Google Talk, the new service will create an open web platform for voice calls and instant messaging, a move that is most easily achievable via acquisition of a rival. Ceo Eric Schmidt has already identified communications as the web's next "killer application".

Web-watchers say a likely target for Google is Luxembourg-headquartered Skype. Led by a dynamic duo from Scandinavia, Niklas Zennström and Janus Friis, Skype has raced to an early lead in the internet telephony stakes.

The moneymen see Google's move as "extremely significant" - to quote Allen Wiener, an analyst at investment group Gartner. "To be a web portal or a new media company," he says, "this layer of communications and mail is essential ... people use it to access and share content."

Google, of course, has already launched its Gmail service, albeit on an invitation-only basis. It has yet to do more than scratch the surface of this massive market.

Georges Harik, Google's director of product management, explains that by basing its network on open technology standards, Google will encourage other internet companies to build their own services on top of Google Talk.

The new service is eyeing such targets as operators of online games networks to internet service providers and operators of large-scale websites.

"We aim to create an ecosystem around [an open communications platform] so that it's in everyone's interest to be open," says Harik.

Data sourced from Financial Times Online; additional content by WARC staff