August 27, 2010

Google unveiled a Gmail phone-calling application

Google may have generated a lot of publicity with its Aug. 25 announcement of an application that makes phone calls through Gmail, but the company is staying mum about any international expansion of the upcoming U.S.-centric service.

“We don’t have anything to announce about international roll-out today,” a Google spokesperson told eWEEK Aug. 26, “but we’re looking forward to bringing localized versions to more people in the future.”

The application requires Google’s voice and video plug-in, which can be found here. Once activated, Gmail users can click a “Call Phone” tab, opening a window with a virtual keypad. Those with a Google Voice phone number will find their Gmail calls display that number as their outbound caller ID.  

According to Google's Twitter feed, more than 1 million calls had been placed through Gmail in 24 hours. 
“We’re rolling out this feature to U.S. based Gmail users over the next few days,” Robin Schriebman, a Google software engineer, wrote in an Aug. 25 posting on the Official Gmail Blog. “If you’re using Google Apps for your school or business, then you won’t see it quite yet. We’re working on making this available more broadly—so stay tuned.”

But if Google is aiming to compete with Skype—an easy assumption, given the company’s recent acquisitions in the VOIP (voice over IP) market—then the international market will play a key factor. Skype sees its business as a global one, and the recent preliminary prospectus for its IPO suggests that a decline in volume of international calling could have a severe effect on its bottom line, the margins of which are already razor-thin. However, Skype’s base of more than 560 million registered users also makes it a formidable contender to any upstarts.

Via Gmail, calls to certain countries—including landlines in France and Britain—will cost 2 cents per minute. That represents the low end of the price scale; at the other extreme, a cost to Cuba will run you 98 cents. A complete list of rates can be found here. An international expansion would presumably make that country-to-country list exponentially more complicated.
But Skype may not be Google’s primary target.

“We assume Google’s ulterior motive is less about disrupting the telecommunications industry (it will still pay termination fees to telcos) and more about driving engagement within Gmail and its social networking activities, to better compete with social networks such as Facebook,” Goldman Sachs analyst James Mitchell wrote in an Aug. 26 research note, as reprinted on Fortune’s Website
But Facebook and other social networks are also looking internationally to expand their user base, which leads back to the original question: when will Google expand Gmail phone-calling offshore?  

Source: eWeek

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