Posted in Menacing Monopoly

Google getting ready to go up against Skype

Another acquisition:

Last month Skype was in talks to acquire VoIP startup Gizmo5. It was a perfect backup plan in case all that IP litigation didn’t work out. – Gizmo5’s SIP infrastructure could theoretically replace Skype’s proprietary P2P back end.

After the Skype settlement, though, Gizmo5’s strategic value to Skype sort of plummeted. In the meantime, Google bought them, say multiple sources with knowledge of the deal, for around $30 million in cash. The deal is done, say our sources, and will be announced shortly.

So what's Google going to do with Gizmo5?

This looks to me like Gizmo5 will be the glue that puts Google Voice and Google Talk together into a single product. And that product looks a lot like a Skype competitor.

Makes sense. What Google doesn't have, can't or won't develop, it can buy. Since it's a near monopoly in the online search and advertising industry, it has plenty of cash to fund its forays into other markets.