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Phone Home: Google Buys VoIP Company Gizmo5

Deal provides Google with the technology it needs to develop its own phone service.

VoIP software Google

Google did not disclose the amount it paid for the San Diego-based startup, but published reports put the price tag at $30 million. Google announced the acquisition in a blog posted Thursday afternoon.

The acquisition brings to Google the technology it needs to develop its own Internet phone service. Gizmo5's technology is similar to Internet telephony market leader Skype, but it is based on open standards and includes client software for cell phones.

Gizmo5's engineers will be added to the Google Voice development team, according to the Google blog. Gizmo5 is already integrated with Google Voice, which allows Voice subscribers to use the Gizmo5 service as one of their numbers.

Google said current Gizmo5 users will still be able to use the service, but it is suspending new signups for the time being and current users can no longer sign up for a call-in number.

The Gizmo5 purchase is Google's most significant acquisition in the telephony space since it bought GrandCentral in 2007. GrandCentral's telephony service technology was the foundation for Google Voice.

Earlier this week Google said it would acquire AdMob, a three-year-old mobile device advertising company, for $750 million. Last month Google executives, while reporting the company's third-quarter results, said they intended to resume making acquisitions now that the recession appears to be ending.

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