SAN FRANCISCO Google stepped up its attack on the telecommunications industry on Thursday with a free service called Google Voice that, if successful, could chip away at the revenue of companies big and small, like eBay, which owns Skype, telephone companies and a string of technology start-up firms.
Google Voice is an expanded version of a service previously known as GrandCentral, a start-up that Google acquired 20 months ago. It is intended to simplify the way people handle phone calls, voice mail and text messages. The service will initially be made available only to existing GrandCentral subscribers; Google says the general public will be able to use it in the coming weeks.
Google Voice allows users to route all their calls through a single number that can ring their home, work and mobile phones simultaneously. It also gives users a single and easy-to-manage voice mail system for multiple phone lines. And it lets users make calls, routed via the Internet, free in the United States and for a small fee internationally.
Analysts singled out the Internet calling features as the aspect of the service that is potentially most disruptive to established companies. While inexpensive Internet calls have become commonplace, Googles potential to reach a mass audience could make a difference, some analysts said.
I would consider Google to have the potential to change the rules of the game because of their ability to bring all kinds of people into their new tools from their existing tools, said Phil Wolff, the editor of Skype Journal.
But in Skype, the dominant player in Internet calling, Google will find a formidable competitor. The service, which is free when people call other Skype users and carries slight fees for calls to regular phones, has 400 million registered users and is adding 350,000 users a day, eBay said. The company is focused on enhancing the services video and videoconferencing capabilities.
Skype is light years ahead in terms of video, simultaneous chat and voice, and the installed base is huge, said Ross Sandler, an analyst with RBC Capital Markets. I dont think they have anything to worry about.
In a presentation to investors on Wednesday, Josh Silverman, Skypes president, said that chat and voice will become table stakes in Internet telephony. People will make their choice of communication software based on who makes the richest video experience.
EBay has acknowledged that Skype does not have synergies with other parts of eBay, signaling that it may try to sell the service in the months ahead.
Internet calls work differently on Google Voice than on Skype. Rather than starting a call from a computer, a specialized phone or an application on a mobile device, Google Voice users call into their voice mail service from any phone. Once there, they can push a button to get a dial tone and call a different number. As such, the service is not set up to handle video calls, though Google offers simple video-chatting capabilities through Google Talk, its instant-messaging service.
For international calls to landlines in a handful of major countries, Google Voice is marginally cheaper than Skype, while Google Voice calls to international mobile phones are as much as a third cheaper than Skypes.
Vincent Paquet, a co-founder of GrandCentral and now a senior product manager at Google, said that fees from Internet calls would probably play an important role in subsidizing the free service, which for now will not carry advertisements.
We can generate enough revenue from international calling to support the service, he said, noting that Google Voice was now running on Googles servers and could operate at very low cost.
Analysts said it was not clear how much domestic or international calling business Google Voice could take from telephone companies. Google, which makes software for cellphones, is already at odds with several telecommunications companies over policy issues and over who will control the quickly growing revenue generated by mobile Internet services and advertising.
Some of Google Voices other features, like voice mail transcription services, are offered for a fee by start-ups like Spinvox and PhoneTag. And conferencing capabilities are sold by some telecommunications providers, but they are also available free through some online services.
Google Voice may raise more hackles with privacy advocates, and perhaps regulators, than it does with competitors. The service would allow Google, which already collects vast amounts of data about the behavior of Internet users, to gather information on their calling habits.
It raises two distinct problems, said Marc Rotenberg, executive director of the Electronic Privacy Information Center. In the privacy world, it is increased profiling and tracking of users without safeguards. But the other problem is the growing consolidation of Internet-based services around one dominant company.
