Google is no competitor for Skype - yet

Google is gathering elements of VoIP, video services, but lacks the complete offerings of Skype

Google's recent purchase of codec innovator Global IP Solutions (GIPS) has observers in a froth over a possible showdown between Google Voice service and Skype, the most popular and largely free VoIP service that includes video and conferencing. But Skype shouldn't worry in the short term.

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The truth may simply be that Google is promoting technologies that advance its real interest - making it simpler for people to use the Internet more. "They sell content," says Diane Myers, an analyst with Infonetics. "They want to enable their content on multiple platforms, especially mobile."

While the company has assembled an impressive array of full-blown and trial services that encourage Internet use, it hasn't assembled a coherent service along the lines of Skype's peer-to-peer voice and video services that interface with traditional switched public phone networks, including wireless.

Google's forays into support for various modes of communication include its open source Android mobile operating system that encourages texting, Web browsing, use of still and video cameras and independent application development. It also has its fingers in e-mail with its free Gmail service, collaboration with Wave and even broadband-over-fiber services with a plan to deliver gigabit services to limited markets.

The purchase of GIPS adds very well respected audio and video codecs that encode those traffic types for IP networks, accommodating for delay, jitter and low bandwidth. But that in itself doesn't mean that Google is ready to compete directly against voice service providers, Myers says. "GIPS is a technology provider to help rich media on the back end," she says.

GIPS has an impressive array of customers -- including Cisco, Yahoo, America Online, IBM/Lotus -- that use its technology in their voice or conferencing services. But GIPS technology is a component in broader services, according to another of GIPS's customers, Germany-based Goober Networks, which provides VoIP, videoconferencing, chat and collaboration services.

"I don't see Google as a competitor," says Peter Uhlich, Goober's CEO. "The real competitor in VoIP is Skype." In fact he says he sees Google more as a potential partner that could wrap Goober's services around its existing offerings.

Combining Goober's services with Google's market clout and financial resources could turn Google into a viable Skype competitor, he says. "The only reason we don't scare Skype is that we're so small," Uhlich says.

Still with Google's deep pockets and its propensity to stir up markets as it did by using its influence to ensure open access to wireless spectrum sold in 2008 by the Federal Communications Commission, the company might well decide it needs to develop its own voice and video services, says Tom Nolle, president of CIMI Corp.

"Given all Google's announcements in the voice arena already, it seems likely that they plan to either enter the VoIP market to compete with Skype or at least to provide their own voice collaboration tools and services," Nolle says in a blog, "competing with some of the Web conference players like Cisco (WebEx) and Citrix (GoToMeeting)."

Because of Google's financial might, it could at the very least influence what services established carriers come up with as they formulate their strategies, he says. "Either move would have market reverberations, but obviously a direct Google move into a VoIP offering integrated with its Google Voice service could be a major game-changer at a time when operators are pondering their own next-gen voice plans," Nolle says.

Read more about voip & convergence in Network World's VoIP & Convergence section.

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Tim Greene

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