Google becomes a Phone Company, acquires Gizmo5

Earlier during the week, Google confirmed the report that its latest acquisition is a company called Gizmo5 which provides Internet-based calling software for mobile phones and computers. The value of the deal is estimated to be around $30 million and represents one of the many smaller acquisitions that Google intends to make as mentioned indirectly on the company’s Q3 earnings report.

The Gizmo5 team will be merged with Google Voice which will help it to become a stand-alone phone service very similar to Skype. Skype has been in the recent years gaining a lot of momentum as an alternative calling service for international purposes apart from traditional phones and wireless carriers. Skype has approximately 480 million users globally and lets you make international calls for a very meager rate. For example, with around $3 per month, you could make unlimited calls to Canada and US if you are equipped with Skype. A modest increase over this rate is all that is required to cover entire Europe or even the world.

Google Voice is also planning to roll out similar kinds of calling plans and services with this Gizmo5 deal. This deal has left traditional telephone companies frowning as it can cause a serious dent in their business. Google with its capacity to popularize VoIP calling can provide users with rates which even Skype cannot. Earlier Google Voice required the services of a traditional telecom as it needed an underlying account and telephone number but with this acquisition, it no longer needs the help of any other company.

Google Voice is well on its way to become the new generation Telco with this deal and can offer users with more services than before. This indeed makes Google a phone company too.

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