Google tests VoIP calls to firms

DEAL TAKES SEARCH COMPANY FURTHER INTO TELECOM

By Jessie Seyfer, 01-Feb-2006
Mercury News

Google is adding another way to cash in on search advertising, confirming Tuesday that it is working with a Florida-based telephone network to allow people to make Internet phone calls directly to the companies highlighted in its search results.

A Google spokesman briefly explained the company's dealings with VoIP Inc. after a Securities and Exchange Commission filing by the Ft. Lauderdale-based company Monday made vague reference to a Google telecommunications service.

The filing added fuel to rumors that the Mountain View search giant might expand further into the telecom world.

Google Talk, launched in August, allows only PC-to-PC conversations. VoIP Inc.'s technology allows PC-to-phone calls that are transmitted over the Internet, meaning a call from a computer could reach any phone, whether cell or land line.

Google has been testing the service, called Google Click-to-Call, since last fall, said company spokesman Michael Mayzel. Mayzel would not release further details about the deal with VoIP Inc.

The Click-to-Call program brings together two of Google's interests -- Internet phone calls and advertising, said industry analyst David Lemelin of In-Stat.

``I think it makes a lot of sense for Google to move in this direction,'' he said. ``It simplifies things. If I search for a restaurant in Los Angeles and I find one I want, I can get connected to them. That's the type of thing that I think could be a revenue opportunity.''

Lemelin said he expects eBay will use its acquisition of Skype, another Internet calling software program, to soon connect potential buyers with sellers in a similar fashion. For Google, using Internet voice protocol to connect people to advertisers is a natural next step, he said.

``Taking advantage of having a loyal, captive audience and bringing that into'' Internet phone calls makes sense, he said.

VoIP Inc. spokeswoman Tammy Snook declined to discuss details or the dollar value of its contract with Google.

Internet voice calling has grown in popularity over the last year -- up to 16 million worldwide in 2005, according to In-Stat. Often it is a low-cost alternative to traditional copper-wire phone service.

Internet phone calls are another example of Google moving beyond its role as a search engine. In January, the company announced it was buying Newport Beach radio advertising company dMarc Broadcasting in a deal that could be worth up to $1 billion. DMarc's automated purchasing service for advertising space on the airwaves will be integrated with Google's AdWords. The company is also dabbling in print advertising and recently partnered with CBS to offer network shows on its Google Video store.

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