Sep 15, 2010

Good for Google but for the others maybe not

Good for Google but for the others maybe not
Google and VOIP
Another day in watching Google control

Google will acquire Global IP Solutions Holding which will give it control of the voice over IP (VOIP) engine that sits behind offerings by competitors like Yahoo and AOL. The company makes processing software for voice and video over IP solutions.
If you are Google this is just another day in the world of M & A but for the rest of the world it’s another day in watching Google control just a little more of the things that others need to run their operations. Good for Google but for the others maybe not so much
Google on Tuesday said it will acquire Global IP Solutions Holding, which makes processing software for voice and video over IP, for $68.2 million. The deal means that Google will own the voice and video conferencing engine behind its competitors’ instant messaging systems.

The search giant said it will use Global IP Solutions (GIPS) for real-time video and audio communications over an IP network (statement). Google is paying 27.5 percent premium over GIPS closing price May 14. GIPS trades on the Oslo Stock Exchange.
While the voice and video conferencing offerings of Yahoo, AOL, WebEx and others may not seem insignificant in the big picture its what might happen next to these offerings that should be of concern. It is a bit ironic that GIP’s counts Chinese search giant Baidu as a customer as well.

Right now, it is being called “business as usual” while under existing contracts. According to GIP’s CEO Emerick Woods in his letter to his customers they may want to be shopping because there are no guarantees. His letter reads.
    Google has been a valued customer of GIPS for many years and has greatly contributed to the development and innovation of our products to date. We have always respected their position in the industry and share the common vision of accelerating next generation innovation in the web-based solutions for real time communications.

    You may have many questions regarding this announcement but for now, until the successful completion of the offer, it will be business as usual for us here at GIPS. You will continue to interact with the same team members and can expect the same level of support and commitment that you have received in the past. Google has informed us that nothing will change for current and prospective customers of GIPS. Following the completion of the Offer, Google intends to continue servicing GIPS’s customers in accordance with existing contracts while offering them the opportunity to transition to new offerings developed by Google. Although we will not have more significant details until the process is complete and full integration efforts are underway, we will keep you informed throughout as events arise.
Google is assembling the pieces between its Google Voice, its Gizmo5 purchase and now GIP’s to compete with Skype in their space. Google figures that between most people being mobile in the next few years its getting more traction with Android. Then as more people move to a wireless only voice solution they can also help them get other voice and video conferencing services as well as free voice services over IP. All bases are being covered thus giving Google a very strong position in the communications industry as well as likely remaining the search giant it is currently.

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