Look Who’s Talking: Google Takes on Telecom

by on August 29, 2005

Google lately seems to be taking on the world. A year ago it launched Google desktop, putting it in competition with mighty Microsoft. Version 2 was introduced last week. But in the same week, the firm also launched Google Talk – the first venture into communications for Google. Technically, by most accounts, the service isn’t groundbreaking–its a somewhat basic instant messenger service. Economically, however, the move caused some tremors, signalling increased competition in a number of markets.

On the first level, Google Talk pits Google head-to-head with Yahoo and other IM providers. Its hard to believe that only a few years ago policymakers were wringing their hands over a feared AOL monopoly over the market. The Yahoo-Google struggle, being played out in other arenas such as search engines, is particularly worth noting.

Importantly, Google Talk (like most other IM services) now allow voice conversations as well as text. This puts Google squarely in the competition with VoIP providers such as Vonage and Skype. Importantly, Google doesn’t yet allow connections from the Internet to the traditional public switched network, but such a move would be relatively easy for the Googlites. And, with connections to the public switched network, Google becomes a competitor as well to incumbent telephone systems. In other words, Google–which a few years ago was just a good search algorithm, is now (or soon will be) in competition with the likes of Verizon and SBC.

Just one more piece of evidence that telephony is not in Kansas anymore. Competition is here, and more is coming–from increasingly unlikely places.

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