[Yr7-10it] Google Voice

[stephen at melbpc.org.au]

'Google’s Free Phone Manager Could Threaten a Variety of Services'

By MIGUEL HELFT nytimes.com Published: March 12, 2009 


SAN FRANCISCO — Google stepped up its attack on the telecommunications 
industry on Thursday with a free service called Google Voice that, if 
successful, could chip away at the revenue of companies big and small, 
like eBay, which owns Skype, telephone companies and a string of 
technology start-up firms.

Google Voice is an expanded version of a service previously known as 
GrandCentral, a start-up that Google acquired 20 months ago. It is 
intended to simplify the way people handle phone calls, voice mail and 
text messages. 

The service will initially be made available only to existing 
GrandCentral subscribers; Google says the general public will be able to 
use it in the coming weeks.

Google Voice allows users to route all their calls through a single 
number that can ring their home, work and mobile phones simultaneously. 
It also gives users a single and easy-to-manage voice mail system for 
multiple phone lines. And it lets users make calls, routed via the 
Internet, free in the United States and for a small fee internationally.

Analysts singled out the Internet calling features as the aspect of the 
service that is potentially most disruptive to established companies. 

While inexpensive Internet calls have become commonplace, Google’s 
potential to reach a mass audience could make a difference, some analysts 
said.

“I would consider Google to have the potential to change the rules of the 
game because of their ability to bring all kinds of people into their new 
tools from their existing tools,” said Phil Wolff, the editor of Skype 
Journal. 

But in Skype, the dominant player in Internet calling, Google will find a 
formidable competitor. 

The service, which is free when people call other Skype users and carries 
slight fees for calls to regular phones, has 400 million registered users 
and is adding 350,000 users a day, eBay said. The company is focused on 
enhancing the service’s video and videoconferencing capabilities.

“Skype is light years ahead in terms of video, simultaneous chat and 
voice, and the installed base is huge,” said Ross Sandler, an analyst 
with RBC Capital Markets. “I don’t think they have anything to worry 
about.” 

In a presentation to investors on Wednesday, Josh Silverman, Skype’s 
president, said that “chat and voice will become table stakes” in 
Internet telephony. 

“People will make their choice of communication software based on who 
makes the richest video experience.” 

EBay has acknowledged that Skype does not have synergies with other parts 
of eBay, signaling that it may try to sell the service in the months 
ahead.

Internet calls work differently on Google Voice than on Skype. 

Rather than starting a call from a computer, a specialized phone or an 
application on a mobile device, Google Voice users call into their voice 
mail service from any phone. Once there, they can push a button to get a 
dial tone and call a different number. As such, the service is not set up 
to handle video calls, though Google offers simple video-chatting 
capabilities through Google Talk, its instant-messaging service. 

For international calls to landlines in a handful of major countries, 
Google Voice is marginally cheaper than Skype, while Google Voice calls 
to international mobile phones are as much as a third cheaper than 
Skype’s.

Vincent Paquet, a co-founder of GrandCentral and now a senior product 
manager at Google, said that fees from Internet calls would probably play 
an important role in subsidizing the free service, which for now will not 
carry advertisements.

“We can generate enough revenue from international calling to support the 
service,” he said, noting that Google Voice was now running on Google’s 
servers and could operate at very low cost. 

Analysts said it was not clear how much domestic or international calling 
business Google Voice could take from telephone companies. 

Google, which makes software for cellphones, is already at odds with 
several telecommunications companies over policy issues and over who will 
control the quickly growing revenue generated by mobile Internet services 
and advertising.

Some of Google Voice’s other features, like voice mail transcription 
services, are offered for a fee by start-ups like Spinvox and PhoneTag. 
And conferencing capabilities are sold by some telecommunications 
providers, but they are also available free through some online services. 

Google Voice may raise more hackles with privacy advocates, and perhaps 
regulators, than it does with competitors. 

The service would allow Google, which already collects vast amounts of 
data about the behavior of Internet users, to gather information on their 
calling habits.

“It raises two distinct problems,” said Marc Rotenberg, executive 
director of the Electronic Privacy Information Center. “In the privacy 
world, it is increased profiling and tracking of users without 
safeguards. But the other problem is the growing consolidation of 
Internet-based services around one dominant company.”

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Cheers,
Stephen