Guessing Google’s VoIP Plan

Om Malik | Thursday, September 1, 2005 | 1:45 PM PT | 36 comments

In my Business 2.0 story, Google Net, I outlined the how’s and why’s of Google’s dark fiber & WiFi plans, and in the accompanying graphic highlighted some of the “bandwidth hungry applications” the company may have on deck. On of them was Voice. I wrote Google could “use VOIP technology to dial phone numbers that appear in local search results.”

Since the story first made the rounds, a few new developments. Google released Google Talk, its voice-enabled IM client based on Jabber platform. And earlier this week there was news that Google was experimenting with selling offline ads. Yannick Laclau, discovered something interesting in an article about AHS systems, the company featured in the Google experimental ads.

“It’s a lot of exposure for cheap,” he said, adding that Google is “doing a ton of tracking on this. They’re using their own 1-800 numbers on this, and it forwards to our line.” The Internet addresses of the online versions of the ads also redirect traffic through Google servers.

As I hinted earlier, this is a pay-per-call model that could be the “VoIP” play for Google. A lot of start-ups have already started mucking around with it. The leader in this space is Ingenio, which has a deal with AOL. The pay-per-call results typically make more money for sites that use pay-per-call model, and this includes various publications and portals. Another start-up that has jumped into the fray is Insider Pages, an Idea Lab company. Jupiter’s Gary Stein has some thoughts on this trend, as he tries to come-up with reasons for why Microsoft bought Teleo.

We know that local merchants would rather pay for a call than a click; having pay-per-call as a product is pretty much a must for anyone looking to get into the local directory business.

I guess, as Voice-over-IM tries to find its footing, the first application that becomes popular is this “pay for call” feature. Yannick sums it up nicely when he writes:

So could all the talk about Google’s VoIP plans really be all about extending its advertising franchise into pay-per-call, rather than offering plain old consumer minutes, a la everyone else?

An obvious, simple and practical observation!

PS: folks - this will be a constantly updated post. I am still thinking about this a bit more. If you have any thoughts, do let me know.

12 trackbacks so far

September 1st, 2005
2:29 PM PT
Mark Evans said:

Google’s Print Foray

Part of what makes Google such a fascinating company is trying to figure out where it goes beyond search. In the wake of Google Talk’s launch, there’s news Google is moving into print advertising by buying full-page magazine ads and slicing them up i…

September 1st, 2005
3:28 PM PT

GoogleÂ’s True VoIP Intentions

Today I was reading an article about Google getting into the print magazine advertising business via itÂ’s AdWords program. The print program is similar to the way ads work online except in print an advertiser gets a photo and a…

September 2nd, 2005
5:06 AM PT
Webjunkies said:

Pay-per-call

Yeah baby, thatÂ’s coolÂ…Â…Â…Â…. Ok, so youÂ’re browsing GoogleÂ’s serps looking for a new MP3 player and you look to the right at the Adwords ads; an ad catches your eye and next to the green URL text thereÂ’s a…

September 2nd, 2005
5:16 AM PT
The Stalwart said:

Google’s “Pay-Per-Call” model

Om Malik’s been way out in front of the rest of the media in reporting on Google (NASD: GOOG). I’m skeptical that they’re trying to build a big, free, ad supported WiFi Network. And I was somewhat Skeptical that they’re

September 2nd, 2005
9:13 AM PT
SiliconBeat said:

Google branches out into print ads

Updated Gee, we gushed last week about Google being on a roll, but turns out there is more. Leadership in online advertising is not enough for the insatiable company. It’s now muscling its way into the offline world too, delivering ads for print publi…

September 2nd, 2005
11:05 AM PT

Friday Links

Google expands Print into EU (Chirac mobilizes troops). Google goes Local in China (SEW) More Om on Google VoIP Technorati launches Blog Finder (and IceRocket has a new Linktracker (via Cuban), which seems like more work that I want to do…)…

September 5th, 2005
4:30 AM PT

[...] ness Model”>

There has been an ongoing dialog (see Om Malik’s Guessing Google’s VoIP Plan, for instance) in the blogosphere o [...]

September 18th, 2005
11:24 AM PT

[...] Една интереÑ?на Ñ?пекулациÑ? за възможните VoIP планове на Google. [...]

November 1st, 2005
9:48 PM PT

[...] The click to call (via Teleo, I am guessing) married to the maps was brilliant. I mean wow! We were only discussing this yesterday on how to marry Google Maps, and Google Talk. Microsoft KOs competition.Think of it as MSN messenger that got smarter, and then found a simpler-easier Friendster, a Plaxo, Intellisync client and well, a bag of chips. My hats off to the team that built Live IM client. It blows that it is not on a Mac. [...]

November 22nd, 2005
9:16 PM PT

[...] A lot of business implications here but at the moment that little evil part of me is thinking ‘great, a single form-field way to pester others with crank calls from advertisers at three in the morning.’ Om Malik wrote about Google’s use of VoIP for commercial purposes back in September - I’m guessing the call made from Google to the lead (step 3 in the screenshots) is an early implementation of this. Of course Ingenio will be concerned - Google’s trying to eat their lunch. google, pay-per-call, advertising, adwords Posted by Greg Yardley @ 3:06 am [...]

November 23rd, 2005
6:30 PM PT

[...] Google is finally testing out its Click-to-Call system. (Greg Yardley first reported this news, but I have been slow in getting around to it.) It has been a long time coming. I have been waiting for this since I wrote this piece in September. I believe this is the right strategy for the company to extend its core competence: attaching ads to anything that can be served up as a web-page. [...]

December 2nd, 2005
8:01 AM PT

[...] The recent post on noted industry observer Om Malik’s blog sees a connection between Google’s plans for dark fiber and Wi-Fi, and the newly debuted Google Talk voice and IM chat application. [...]

24 comments so far

September 1st, 2005
1:56 PM PT
none said:

an easy extension (via XMPP or SIP) is to open up a secure multi-media link w./ the end user as/when they click on the ad and “talk live” - the call can now be subsidized by the ad-providers — sorta 1-GOOGLE-vendor where GOOG is a stand-in for 1-800 prefix…. and perhaps the premium-ad buyers can subsidize your VoIP to PSTN calling if you click on their ad — i.e. they give me an instant PIN usable for 60 minutes if i see their ad… it could be a very google-twist on call-in, call-out PSTN issue.

-r

September 1st, 2005
3:41 PM PT
Neeraj said:

At SES this year, Verizon Superpages already announced what Google may be contemplating. Here’s the release:
(link)

Very clever and payments occur when potential customers make calls to merchants.

NC

September 1st, 2005
4:41 PM PT
Steve Borsch said:

“If you have any thoughts, do let me know.”

It’s all about observation and analytics. Having been involved deeply in analytics and close to Net Perceptions and their “Recommendation Engine” during my tenure at Vignette (which we OEM’ed and Amazon used for “People that have bought this book have also bought these ones.” We all know that Amazon has kept all their clickstream data and has petabytes of collected data on shopping behavior, purchases and — with their API exposed — to 3rd parties leveraging that data in new ways.

Gmail, Google Maps, search history identified to a specific individual, blogging and now IM & talk, imagine the data being captured that can be matched with location awareness (i.e., IP address database matching) and it becomes pretty clear: Google is building an analytics platform that eventually will know more about me and my habits than I know myself.

More on my recent post sparked by Google Talk’s debut: (link)

September 1st, 2005
4:42 PM PT
Steve Borsch said:

URL didn’t post correctly so here it is again: (link)

September 1st, 2005
4:44 PM PT
Steve Borsch said:

Sorry Om…WordPress doesn’t seem to like my URL underscores.

The name of the post referred to is: Voice will be free and will converge with data (which will not be free)

September 1st, 2005
5:18 PM PT
Venki Iyer said:

I don’t buy into any connection between gtalk and pay-per-call (or click-to-call): click-to-call just requires client infrastructure (lessee - AIM, Yahoo, MSN, skype, any old voip client) - there is no reason to try home-cook this functionality as and of itself. I think it is just two goog projects having points of convergence.

September 1st, 2005
5:26 PM PT
Jack Miller said:

Thank you for the post. The magnitude of this is mind bending. Fewer ads all over the place but more effective ads all over the place. I can’t see Googles VoIP getting past the Skype, Gizmo, etc. model of 2 cents per minute to call out. However, with more and more wireless handhelds the number of calls to “phones” will drop dramatically. Who needs a phone connected to the old system? Sure dual band cell phones will be common but land lines are dead.

September 1st, 2005
8:25 PM PT
Allen Tsai said:

It seems pay-per-call are the immediate plans. There have been hints Google maybe getting into the cell phone game as well with the increasing potential of VoIP and WiMAX. Whether these two have any convergence is something that may be interesting to consider.

September 1st, 2005
10:47 PM PT
Ross Dawson said:

Very interesting. One angle is that Free Conference Call (http://www.freeconferencecall.com/) has a business model based on providing the infrastructure that carries voice traffic, so it can make money from free conference calls. More broadly, Google’s move is shifting online attitudes to advertising (segmented, tailored, pay-for-results etc.) to the offline world. Broader musings on all this at:
(link)

September 2nd, 2005
7:16 AM PT
Beth Cart said:

Tom Keating had an interesting post a couple weeks ago on eStara’s pay per call service that can be used to bridge online and pring advertising.

(link)

September 2nd, 2005
7:46 AM PT
Dan said:

I am expecting GOOG to make voicecalls recordable and searchable.

September 2nd, 2005
9:40 AM PT

Think about adwords. I believe that for some search terms, advertisers would be willing to bid higher for a call via Google Talk than for a click, increasing revenue for Google.

September 2nd, 2005
9:49 AM PT
Venkatesh said:

here are my thoughts on how the Voice Ads are gonna work with google talk. Appreciate your feedback.

September 2nd, 2005
10:04 AM PT
kimo said:

this is all interesting, but isn’t it much cheaper for businesses to perform business on their websites selling things rather than on the telephone with a live agent?

September 2nd, 2005
10:40 AM PT
Clint Dixon said:

Unfortunately while a well written post of speculation, Google is not about to drop pay per click for pay per call..

I have used ingenios pay per call advertising and conversion is dismal.

I caqn understand this as my charge is set to $2.99 per minute.

I am sure people will consider the pricing and go right back to PPC ads to find answers they want.

Clint

September 2nd, 2005
11:32 AM PT
Aswath said:

If it is true that voice is just an application in the world of Internet, then why would Pay per call be any more lucrative than Pay per click?

September 2nd, 2005
12:41 PM PT

How does a $82B grow without cutting into its base?
I think you hit on it with the pay to call!

I think this is the reason they are getting into print and also text messaging via dodgeball and google sms. The person has to call up for the print to connect and they’ll connect to the advertiser. But they will provide a simple click with no need to enter a number for text messaging since they already have the person’s cell number. Now, if you take Google Talk with Skype, they can easily do click to call without a number for online ads also because they’ll have the Skype number.

The click to call/VOIP method to connect with advertisers will be unifying factor as people are not searching. They aren’t killing their core base, but they are expanding into areas and growing into “the place to advertise anywhere”. The other reason to this is that they expand into other age demographics they normally may not get. I think text messaging is going to be the age demographic for really young kids. Print will go for much older people. Also note that cell phones and print are two areas that diversifies them out of just having the PC be the only source to make money. They’ll leverage the brand to grow into new mediums and age groups while retaining their core.

If this idea work, they may well be the largest company in the world in a year.

Anurag (Anu) Nigam

PS. I am biased because my company is in the text messaging space.

September 2nd, 2005
12:43 PM PT

Please edit last comment…
“I think you hit on it with the pay to call!”
to
“I think you hit on it with the click to call!”

September 4th, 2005
12:44 PM PT

Om

Nice post.

While I wouldn’t rule out pay per call as being part of the equation, I think this is about location-based advertising.

Wifi calls also gives them a free location feed. This can be used to tap into the long tail of offline merchant advertsing, just as they’ve exploited the long tail of online.

More at MobHappy (link)

(If the link doesn’t work, search for Google’s Big Idea).

I’d be intrigued to get your view.

Cheers

Russell

November 23rd, 2005
12:24 PM PT
tedwick said:

wow. you are prescient. google click-to-call

google’s help section for advertisers for using something new: click-to-call. if someone wants to call the advertiser, google will connect them. sounds exactly like what you’re talking about. they may not be doing away with pay-per-click, but they’re certainly going into advertising over the phone.

May 10th, 2006
5:05 PM PT
Pablo Munoz said:

Who can explain the relationship with VOIP, Inc. Voice one, etc and their beta with google from earlier this year. These guys are techno inventors, have all the stuff ready to go. Could google want to buy them and therefore own their own voip company? Elaborate?

June 14th, 2006
5:08 AM PT

Do you spend lots of money calling? TelExtreme will change your life! Earn money calling! Visit: (link)

August 22nd, 2007
10:11 AM PT
360 view said:

would love to see true VOIP service from Google — as they now how to manage information i.e. convenience would be at its best.

December 9th, 2007
11:16 AM PT
Pay Per Play said:

I think this will put pay per call, cpa, adsense out of business or at least give it a run for it’s money. It’s called (Pay Per Play and is the newest form of online advertising giving webmasters the opportunity to generate revenue from their websites with one BIG difference.

You get paid for EVERY visitor that visits and they don’t even have to click on any ads or anything. All webmasters have to do is insert a piece of java script code like adsense, and when visitors enter a page that has the code, a five second audio is played automatically and the webmaster gets paid.

I think this is going to be the biggest thing since adsense exploded onto the scene because the advertisers that are lined up to start advertising are huge multi nation corporations that will be bidding per play to have their audio played on your site.

This is a new concept and all websites are being accepted with the exception of adult, hate or any other unethical topical websites. If you are interested in signing up, visit link) and fill out the form. It only takes about 2 minutes and most are automatically accepted.

I don’t how long automatic acceptance will last so go there know and register while you can. I think (pay per play will be huge and you will be doing yourself a huge disservice neglecting it.

Goto link) now!

Leave a Comment

Get the comments RSS feed, instant notification of new comments

Editorial Masthead

Carolyn Pritchard
Managing Editor
Celeste LeCompte
Special Projects Editor
Om Malik
Senior Writer
Stacey Higginbotham
Staff Writer
Wagner James Au
Contributing Editor
Liz Gannes
Staff Writer
Chris Albrecht
Staff Writer
Katie Fehrenbacher
Staff Writer
Josie Garthwaite
Staff Writer
Close
E-mail It