Google vies for slice of VoIP

Google is about to challenge Skype for the global "free" internet phone call crown.

The giant of search has bought, for a reported US$30 million, Gizmo5, the VoIP technology developed by Michael Robertson, famed during the dotcom boom for his controversial free music site, MP3.com.

Skype, now owned by an investor consortium that includes eBay, had been locked in a lawsuit over control of Skype's proprietary P2P technology. When eBay bought Skype in 2005, it left ownership of the intellectual property in the technology with Joltid, the company formed by Skype's founders, Niklas Zennstrom and Janus Friis. Without it, Skype cannot offer Skype-to-Skype calls, which are a large part of the business.

Seeing the danger of losing the Joltid IP, eBay opened negotiations to buy or licence Gizmo5 to have a protective fallback if the case went against Skype/eBay. But, with the suit now resolved and that danger past, the sale fell through.

Google, which launched Google Voice in beta form recently, then stepped up. The interest was obvious: Google Voice, as it stands, is a clever application that allows a user to have one number for a series of telephones but it cannot make calls to conventional PSTN telephones. Gizmo, a proven, open standards-based SIP (session initiation protocol) technology, can. Suddenly the massive Google gorilla could see a chance to break into what until now has been pretty much a Skype monopoly.

That Google has been interested in Gizmo for some time seems clear from a section within the Google Voice online support site (tinyurl.com/b6ontl) showing users how to forward Google Voice calls to a Gizmo number.

Last year Skype carried about 8 per cent of all international voice traffic.

Yet, coming from behind does not seem to bother Google. Like their businesses of connecting people through diverse locations, both Skype and Gizmo5 have a strong international flavour.

Skype was written in Estonia by the developer team that had been formed to build peer-to-peer music piracy site Kazaa.

The Skype Group, which marketed the technology, was founded by Zennstrom, a Swede, and Friis, a Dane.

The headquarters is in Luxembourg but there are offices in London, Tallinn, Tartu, Stockholm, Prague and San Jose, California.

eBay was founded in 1995 by French-born Iranian computer programmer Pierra Omidyar and is based in San Jose, California. It now also owns PayPal, the leading internet payments gateway. It has localised websites and offices in 30 countries, including Australia.

Google was founded by US students Larry Page and Russian-born Sergey Brin and is based in Mountain View, California. Google is now valued at US$23 billion and is rated by Fortune as the most powerful brand in the world.

Gizmo5, previously known as Gizmo Project, is an all-American project based in San Diego, in southern California.

- © Fairfax NZ News