A lot of speculation about Google’s move into VoIP has started because of a job listing which was first reported by Phil Harvey over at Light Reading, and then mis-interperted as a possible move into VoIP by everyone and some incorrect assessments made by pundits. The […]

A lot of speculation about Google’s move into VoIP has started because of a job listing which was first reported by Phil Harvey over at Light Reading, and then mis-interperted as a possible move into VoIP by everyone and some incorrect assessments made by pundits. The first reason, why Google is not doing VoIP: how the hell do you monetize something like this. Since Google’s business model revolves around embedding text-ads in pretty much everything, it doesn’t make sense for them to even indulge in VoIP. Julian Hewitt of Ovum thinks there is a possible model, but seems to me like a bit of a stretch.

“‘This would be an obvious development for the world’s leading search engine. Millions have downloaded the ‘Google toolbar’, so why not a VoIP client too? The appeal for Google is obvious: search for something, then ‘click here’ if you’d like to speak to the company that’s selling what you’re looking for. Google then collects a fee from the ’sponsor’ for each voice connection. Voice calls with very little cost AND funded by advertising,” he said in a research note.

Thank God, Google was quick to dismiss this notion. I suspect that people are reading too much into Google’s job listing, which in my opinion has a very simple explanation. Google is growing, and it is adding data center capacity pretty much all across the planet. (Because it wants to be the Internet OS!) Europe, Asia and US and it needs to link these together with a dedicated backbone, like most smart companies do. In order to do that, they have to build a global virtual network. In other words, they have to find the best pipes at the lowest possible rates from hundreds of carriers, and assess that they will not go out of business, and will be able to meet the future demand. Now that’s the real reason, it needs a chief negotiator. It’s about the infrastructure stupid.

  1. Google going VOIP?

    According to this piece at The Times Online, you would certainly believe it to be the case…

    Julian Hewitt, senior partner at Ovum, a telecoms consultancy, said: “From a telecoms perspective there is a big appeal in the fact that Google is a …

  2. Google to offer internet phone services?

    In Google gears up for a free-phone challenge to BT Elizabeth Judge at the Times speculates that Google could be building up a communications infrastructure that at some point could be opened up to launch a free internet telephone service….

    AUTHOR: Charlie Sierra


    I beg to differ, and I’ll restate a 5yr old opinion that Google/Yahoo etc. will not only enter the VoIP market, they will eventually own all relevant communication services.

    As for as monetizing VoIP, its very easy, but I must be coy. Lets just say that its an opportunity in the tens of billions of dollars. (Is it true that Google’s internal code name for this project is: Cha-ching?)

    Irrespective of the occasion stock market temper tamper, Ebay/Google/Yahoo/etc are perfectly positioned to deliver terrific ROIC numbers. Something that Mr. Buffett and Paul Johnson still harp on.

    Until and unless the telcos figure out what business they really are in, they are just future roadkill.

    Not that there’s anything wrong with that. vbg.

  3. Google si mette a telefonare? Non ci credo

    Grande eco ha avuto la notizia riportata sul Times di Londra a proposito della volont i Google di acquistare sul mercato all’ingrosso grandi quantit i fibra ottica (dark fiber). Questa notizia, unita a quella della ricerca di personale con ce…

    AUTHOR: Dimitar Vesselinov

    Om, do you want to search for your voice data? What about transcripts? People want this kind of information and I suppose they will get it. It’s about the data, stupid!

  4. Google not doing VoIP

    Om Malik quickly tamps down a rumor virus: Om Malik on Broadband サ Why Google Is Not Doing VoIP…

    AUTHOR: Aswath Rao

    Om, thanks for speaking up. While at it, you should have taken to task some of the bad reporting, like Google raised only 26 million in IPO; how could Google ensure QoS if they focus only on backbone connection; if the industry claim that voice is a small fraaction of data traffic, why would Google need to add extra capacity just because they are entering voice business. Granted the last two are intricate and debatable; but shouldn’t the first time be checked because it is a factual item?

    I would like to exception to Charlie’s comment. It is possible that Google/Yahoo “own all relevant communication services”. But there is no “Cha-ching”. The only real service is directory lookup. For this service even micropayment will be a gushing torrent. The real cha-ching is in interconnecting to PSTN only as long as the regulators maintain the arbitrage opportunity.

    AUTHOR: Mark Evans

    you may be right about google’s data backbone needs but VOIP isn’t such a big stretch. Google is a platform for delivering online services. clearly, some of them such as search are lucrative while others such as social networking and e-mail have to find their way. my take is there are a lot of smart folks at google, and they’ll figure out a way to make money from VOIP. it may not be a direct business model – i.e. charging for VOIP – but perhaps a way to extend the brand to increase its search/AdSense business.

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