Sunday, January 23, 2005

Google gears up for a free-phone challenge to BT

By Elizabeth Judge, Telecoms Correspondent

GOOGLE revolutionised the internet. Now it is hoping to do the same with our phones.

The company behind the US-based internet search engine looks set to launch a free telephone service that links users via a broadband internet connection using a headset and home computer.

The technology that will enable Google to move in on the market has been around for some time. Software by the London-based company, Skype, has been downloaded nearly 54 million times around the world but no large telecommunication firms have properly exploited it.

BT, which connects seven out of ten British households, has developed its own internet-telephone service. However, the telephone giant, which has the most to lose if the new technology takes off, has been reluctant to promote it heavily.

Julian Hewitt, senior partner at Ovum, a telecoms consultancy, said: “From a telecoms perspective there is a big appeal in the fact that Google is a search operation — and of course the Google brand is a huge draw.”

Mr Hewitt said that a Google telephone service could be made to link with the Google search engine, which already conducts half of all internet inquiries made around the world. A surfer looking for a clothes retailer could simply find the web site and click on the screen to speak to the shop.

The basic cost of making calls across the internet is almost nil. The real cost is in developing the software; after that, the service exploits available internet capacity. However, charging does become necessary to link internet calls with the traditional phone network.

Read the rest here.

So, will Google first purchase Skype? And when?

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