Google May 18 agreed to purchase real-time voice and video processing software maker Global IP Solutions (GIPS) for $68.2 million. Google may have targeted GIPS' assets to build a VOIP platform to compete with consumer VOIP market leader Skype, which has a loyal user base of over 400 million users. Looking at the entrenchment of Internet powers such as Google in search and Facebook in social networking as precedent, it will be nearly impossible to displace Skype from its lofty VOIP perch.
Google May 18 agreed to purchase Global IP Solutions
(GIPS), which makes software for processing high-definition audio and video
over the Web, for $68.2 million.
The buy is a 27.5 percent premium on GIPS' closing share price
from May 14.
"The Web is evolving quickly as a development
platform, and real-time video and audio communication over the Internet are
becoming important new tools for users," Google Engineering Director Rian Liebenberg said in a statement.
"GIPS's technology provides high quality, real-time audio and video over
an IP network, and we're looking forward to working with the GIPS team at
Google to continue innovating for the Web platform."
VoiceEngine and VideoEngine tackles issues that
challenge the integrity of real-time voice and video delivery over IP networks,
including jitter, delay, lip synchronization, bandwidth optimization and fault
GIPs serves more than 800 endpoints, with Google, Yahoo,
Nortel, Cisco WebEx and IBM Lotus among its top-tier customers. GIPS' rivals
include Skype Cisco's Tandberg
and Polycom. A GIPS
spokesperson explained to eWEEK in an e-mail May 18:
"GIPS competes with anyone who offers an HD voice
and video codec, even Skype's SILK, except GIPS has their own codec and they
support other popular codecs on the market such as H.264, G.722 and
Taking other Google moves and acquisitions into
consideration, Google may have targeted GIPS' assets to build a VOIP platform
Google late last year purchased
Gizmo5, whose Web-based calling client lets users make phone calls
over the Internet, similar to programs such as Skype. The Gizmo5 assets are
expected to be bundled with the Google Voice phone management service.
The addition of GIPs provides Google with firepower to
serve enterprises VOIP as well.
If Google's intentions are to build a rival service to
Skype, it will be quite a challenge. Armed with Google Voice, Gizmo5 and GIPS, Google
certainly has the technology firepower to build a comprehensive voice and video
But Skype has a loyal user base of more than 400 million
users. Looking at the entrenchment of Internet powers
such as Google in search and Facebook in social networking as precedent, it will be nearly
impossible to displace Skype from its lofty VOIP perch.
Perhaps Google's designs for these assets are not so
grand. Google could simply use its existing assets to create applications for
GIPS in April
GIPS VideoEngine for Android, which provides mobile developers tools
to build video chat and conferencing into applications running Google's Android
mobile operating system.
GIPs CEO Emerick Woods said
in a letter on the company's Website that Google has been a valued customer of
GIPS for many years and "has greatly contributed to the development and
innovation of our products to date."
Woods added that Google said Google will continue to
fulfill GIPS's customers' contracts "while offering them the opportunity
to transition to new offerings developed by Google."