Google Getting Its Telco Ducks in a Row

Observers say Google’s purchase last week of open source VoIP company Gizmo5 is a significant step in the search engine giant’s attempt to create an online alternative to the traditional telephone network.

Gizmo5, they say, represents important unification – the glue, as TechCrunch’s Michael Arrington, who broke the news of the purchase, put it – connecting two existing Google services, Google Voice and Google Talk, and making the collective entity extremely flexible and functional. There is no technical reason the combined entity can't take on existing telephone companies.

Users of Google Voice can have any of their devices -- running on any phone number they own -- ringed, beeped or otherwise prodded when those lines are associated with a Google Voice VoIP number that is pre-chosen by the user. Google Talk is a VoIP function that lets users communicate with each other within the Google network.

What was missing from the mix was the ability to integrate these services with outside networks, including the legacy public switched telephone network (PSTN). That is what Gizmo5 brings to the table. Gizmo5 works much like Skype, and its SkypeIn and SkypeOut services, which efficiently marry the Internet-based and traditional networks. An advantage of Gizmo5, the stories point out, is that it is based on standards and the not-proprietary technology that Skype uses – and that has caused it trouble.

The commentary suggests that Google could attempt to parlay this three-legged stool – Google Voice, Google Talk and Gizmo5 – into an alternative to the existing phone network. Writes DailyFinance’s Sam Gustin:

The Gizmo5 acquisition makes a world of sense for Google because it adds a major piece to Google's mobile network puzzle. That's because Gizmo5's open standards-based web calling system allows incoming or outbound calls to real phones. In other words, this deal gets Google one step closer to realizing its goal of forging a parallel communications network independent of the incumbent cable and phone companies.

Google’s overall goal is not hard to figure out, though the details, of course, are very complex. It’s fun watching the company systematically execute a strategy that will make it a formidable phone carrier -- and doing so without running afoul of regulators.