Google dives deeper into networking

No longer content with indexing billions of items on the Web, Google has been expanding its offerings during the past year or so into areas such as desktop search, 3-D mapping and location-aware services.

Recently, it took a step into the world of telephony services, launching its Google Talk instant messaging and VoIP chat service. This latest move is just part of the company's expansion into the corporate computing realm.

Earlier this summer, Google made a strategic investment in broadband-over-powerline service provider Current Communications Group, and rumours are circulating that it aims to construct a nationwide fibre-optic network that, among other things, could support free Wi-Fi access for all.

A Google spokesperson would not comment on the company's plans, except to say that it was "continually exploring opportunities to expand [its] offerings".

"We are continually developing new technologies to help users find and access the information they need," she said. "We release all of our products and services with our users in mind, and we remain focused on our company mission to organise the world's information and make it universally accessible and useful."

IT managers should be watching because Google was coming, the Enderle Group's Rob Enderle, said.

"Google really wants to be the centre of communications," he said. "It has grasped that as its initiative ... At some point they will be a company [IT managers] will want to consider."

Google seems to be primed for change. Earlier this month, it announced it was filing for a second public offering, which, with its stock price now hovering around $US280, could raise about $US4 billion.

Preparing for battle

Google hasn't said what it plans to do with the money. Analysts speculate that the company, which already has deep pockets - some $2.9 billion in cash on hand, will probably use the money to fund acquisitions. The idea would be to shore up its position as it takes on industry heavyweights Microsoft and Yahoo! on the Web portal and software side, as well as prepare for a possible battle with telecom service providers such as SBC and Comcast.

"Google is trying to build up its war chest because it realises it's going to war with some pretty big players," Enderle said. "It's going to be rolling against some heavy hitters already in the communications space, many of them old legacy companies like SBC ... So they are moving to build that war chest before they fully engage in battle."

The company's release of Google Talk last week illustrates the firm's grander vision. Google Talk is an IM and VoIP-based chat service that pits Google deeper into competition with Web portal giants AOL, Microsoft and Yahoo!

Google said it hoped to differentiate itself from competitors by forgoing proprietary code for open IM protocols. Google is latching on to the Extensible Messaging and Presence Protocol (XMPP), an open standard for IM and presence developed by the Jabbar Software Foundation.

It is supported by Jabber Open Source, Jabber, iChat and several other programs.

By using an open standard, Google will have an instant community of users that adopters of Google Talk can add to their buddy lists.

"Its strategy of picking the XMPP protocol and rallying all the troops that are not on the proprietary networks [such as AOL, Yahoo and MSN] will generate a Google IM community in a hurry," said Ed Marshall, head of the global threat center at IMlogic, which develops security and management gateways to help corporate administrators control consumer IM traffic on their networks.

At the same time, however, Google Talk would introduce another variable into enterprise administrators' control and security plans in that they have to factor in another network, Marshall said.

An interesting aspect of the Google Talk service is that users must have a Gmail account with Google. Gmail used to be by invitation only, but last week when Google unveiled Google Talk it also announced that anybody can get a Gmail account as long as the user inputs a cell phone number.

While Google said that requirement was to ensure the legitimacy of Gmail users, analysts noted it also suggests a broader plan to make Google a communications player.

"Giving people access to information from any location is both a worthy goal from the point of view of getting the world hooked up, but it also means that it could eventually add to their revenue," research vice-president of content management and retrieval solutions at IDC, Sue Feldman, said.

Today, about 99 per cent of Google's revenue comes from advertising, with the rest coming from licensing and enterprise products. But Google executives note in reent financial filings that pressure from competitors is slowing revenue growth.

As a result, the search giant is branching out, developing technology in a range of areas, including communications, Web browsing (earlier this year it hired Ben Goodger, one of Firefox's top programmers) and applications.

"Their desktop product has a text editor, but it's not Microsoft Word," Feldman said. "Are they also going in the direction of tools that create content? It's an interesting thought."

Keep on moving

Google hasn't been one to stand still since its launch in 1999, but the recent flurry of activity has industry observers abuzz - and somewhat confused - about where Google is heading next.

Technology and IS manager at Shakopee School District in Minnesota, Wade Phillips, said he followed Google's moves to a point.

"They are getting to a point that they are diversifying their offerings and products to increase their revenues and decrease risk," he said. "I would expect any smart, successful company to leverage their assets to expand. VoIP is a very young but growing market, and with more companies bundling services like Internet access, video and phone service, Google will be the next to jump on the bandwagon."

The use of Google products and services in his IT department today remained limited, Phillips said. The school district didn't use Google's enterprise search appliance but did use its desktop search application, for example. As for Google's move toward telephony services, Phillips said he didn't expect his buying decisions to be affected in the short term.

The Kelsey Group analyst, Greg Sterling, expected to see Google make a bigger push into the enterprise.

"One of the issues for the company long term is to diversify its revenues beyond just ads," he said. "Enterprise customers are willing to pay for these kinds of products and services if they perform well."

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