New Skype Competitor: Google May Acquire Gizmo5 For $30M

Google may be making a big play in the Voice-over-IP (VoIP) market and competing with Skype thanks to an acquisition of VoIP startup Gizmo5.

The TechCrunch Web site, citing multiple unnamed sources, reported Monday that Google purchased Gizmo5 for $30 million.

San Diego-based Gizmo5 develops software that allows users to make VoIP phone calls using their PCs or other mobile devices. Gizmo5's technology allows free PC-to-PC calls, and discounted calls to mobile phones or landlines.

The acquisition of Gizmo5 would bring Google the key piece to offering a complete VoIP capability and potentially compete with Skype.

Google currently has Google Talk, which allows free on-line chatting between users, but which is not set up to call specific phone numbers. Also, both users must have the Google Talk client running in order for it to work.

Google is also beta testing Google Voice, an application which the company said will let users have a single phone number which can ring all the users' other phones and offer a variety of common phone features, such as phone call recording, conference calling, and phone screening, and which works with SMS as well.

Michael Arrington, author of the TechCrunch story, said that the acquisition of Gizmo5 could allow Google to tie Google Voice and Google Talk together into a single product which would be a potential competitor to Skype, currently the primary VoIP provider.

Google has yet to formally announce an acquisition of Gizmo5, but on Monday it did unveil the $750 million acquisition of AdMob, a three-year-old mobile advertising display company.

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