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 tolerance.
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 ARM-WB."
Taking other Google moves and acquisitions into consideration, Google may have targeted GIPS' assets to build a VOIP platform to compete with Skype.
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 communications engine.
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 Android.
GIPS in April launched 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."