Google Offers Free Voice Calls Via Gmail

Google took a bold stride onto Skype’s turf yesterday, announcing that Gmail users will now be able to call landline and cell phones directly from their email.

Google Inc said users of Gmail will now be able to call telephones directly from their email, putting it in direct competition with Web calling service Skype and traditional operators such as AT&T and Verizon. Photo: Google

Google Inc. announced on Wednesday that it is adding a free e-mail service which will allow users of Gmail, the company’s Web-based e-mail service, to make voice calls directly from their computers.

The service will appear in Gmail users’ chat windows with a “Call phone” button. When clicked, a telephone dialer will pop up on the screen, and users can place calls using an internal microphone or connected headset.

This move places the Internet search giant in direct competition with Web calling service Skype and more traditional operators such as AT&T Inc and Verizon Communications.

“Starting today, you can call any phone right from Gmail,” said Google in the post on the company’s Gmail blog. The new service allows U.S. Gmail users to place calls from any microphone-equipped computer to any telephone in the world.

Calls in the U.S. and Canada will be free through end of the year, undercutting rates of 1.2 to 2.1 cents-per-minute charged by Skype, the most popular PC-to-phone service.

Skype, Google and others have been offering free computer-to-computer calling for years. However, Google seeks to generate revenue on its new PC-to-phone service by charging 2 cents or more per minute for international calls.

Google has added a "Call phone" function to Gmail that will put Google in closer competition with Internet phone service Skype. Photo: Google

Rates for international calls will vary widely, even within the same country. The company posted a rate chart available on its Google Voice blog. Gmail users also will be able to receive calls on their computer once they obtain a free phone number from Google.

The technology behind the new service is provided by Google’s Voice telecommunications hub, which the search giant has been working to grow. The service had previously been available on an invitation-only basis, but was expanded two months ago to accept all requests.

Last year, the company said it had assigned some 1.4 million phone numbers through its voice service, which can field calls made to a user’s home, office or mobile phone number.

The company said the feature will be useful to make quick calls when a user is on a computer, or for placing calls in areas with poor reception.

“Given that most of us don’t spend all day in front of our computers, we thought, ‘wouldn’t it be nice if you could call people directly on their phones?'” Robin Schriebman, Google software engineer wrote in a company’s blog post.

In addition to incorporating Google Voice’s technology into Gmail, the company plans to market the new service by deploying red phone booths at colleges and airports throughout the country, from which people can make free calls to U.S. and Canadian numbers and save on international calls.

Google also plans to allow users to transfer, or “port,” their existing phone numbers on to Voice, a feature that will be available soon, Walker told the AP.

For now, the new calling service will be offered only to those with Gmail accounts, although Google did not rule out the possibility of expanding the service to businesses and government agencies that use Gmail as part of an applications suite that includes other programs.

Google’s announcement is somewhat untimely for Skype S.A., which recently filed plans for an initial public offering of its stock. The Luxembourg-based company had been under the ownership of eBay Inc. for four years, before being sold to private investors last November for about $2 billion.

Most of Skype’s 560 million registered members use the company’s free PC-to-PC calling service, but 8.1 million are paying customers. However, the company has performed well in recent months, earning $13 million on revenue of $406 million during the first half of this year.

With Voice in Gmail, some experts believe business adoption and revenue from the service will be equally poor.

“Google is taking the easy road of arming their army of fans and users with something just good enough to use – but not necessarily good enough to meet enterprise requirements – and standing back and watching to see how they can shape the market,” said Tom Austin, Google applications analyst at Gartner.

As a result, Austin said he believes Google’s paid revenue stream for the service will be quite small: just $20.3 million per quarter, or 0.3% of Google’s second quarter revenue.  [Gmail Blog via CNN and Reuters]

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