E-Commerce News: Internet: Google Mum on VoIP Rumors

"Google might incorporate VoIP into its offerings to advertisers, giving them the ability to set up phone calls with consumers via a single click of a link," said Jupiter Media analyst Joe Laszlo. "But I do not see much benefit to Google in pursuing VoIP in the sense of the services from Vonage."

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A job listing on Google's Web site seeking a "strategic negotiator" to help provide a "global backbone network" has spurred speculation that the search engine giant is planning to enter the VoIP (voice over Internet protocol) market.

Also fueling the rumor were comments from Julian Hewitt, a senior partner at Ovum, an analyst firm in the UK.

"Google are the number one brand on the Internet and I believe that the voice over [Internet protocol] technology will become a standard addition to Internet components," Hewitt told The Times of London, which first reported the story.

Mixed Feelings

Google will not comment on the rumor, and analysts disagreed on whether the move was likely.

"I wouldn't be surprised. It's a nice way for them to expand what they're already doing," Kate Griffin, senior analyst at Yankee Group, told TechNewsWorld. "It would keep key users on their site for longer."

But Jupiter Media analyst Joe Laszlo disagreed. "It's highly unlikely that Google will enter the VoIP telephony market," he told TechNewsWorld. "Google might incorporate VoIP into its offerings to advertisers, giving them the ability to set up phone calls with consumers via a single click of a link, for example, or enabling voice chat easily through Google results pages. But I do not see much benefit to Google in pursuing VoIP in the sense of the services from Vonage, AT&T (NYSE: T) CallVantage and Lingo and the like."

Niche Service

On that point, Griffin did agree, saying that she imagined Google offering would be a niche service more like Skype than the full-service providers. Skype offers a download that allows two users who both have the program to talk to each other through their computers using headphones. It is more akin to instant messaging than to traditional phone service.

Laszlo said that the most successful VoIP services are like traditional phone service in that they use a regular telephone and offer a monthly subscription fee.

"There's not real good extension of Google's core business model into the VoIP telephony world. And I don't see Google being excited about expanding in the direction of consumer subscription-based services," he said.

The Yankee Group estimates that by 2008, 17.5 million households will use some type of VoIP service. Now that number is at less than 1 percent of households.