Google VoIP rumours fuelled

A team of Google honchos met this week with several VoIP service providers, sources familiar with the talks told ZDNet UK sister site CNET News.com, renewing speculation that the search giant may be exploring a move into the fast-growing market.

"They were fairly aggressive about getting our opinions," said one Internet phone executive who facilitated several meetings between Google and Net phone interests here at Spring 2005 Voice on the Net. The executive requested anonymity because of the sensitive nature of the meetings.

Google product manager Eric Sachs was among nine Google employees who attended this week's conference, which at 6,000 attendees this year is one of the largest of its kind in the country, one source said. Sachs is a longtime friend of Jeff Pulver, founder of free Internet phone provider Free World Dialup, and creator of the VON conferences.

Google declined to comment for this story.

As recently as last month, Google downplayed its interests in VoIP, although services based on VoIP have seen rapid growth in the past year, thanks in part to rates that are typically below what traditional phone services charge.

The meetings offer further confirmation of the view that as the Net phone business starts to take off, search giants and Web portals such as Yahoo may not be far behind. Among the announcements at VON, America Online said it plans to unveil a VoIP service in the next month, heightening speculation that Yahoo, Microsoft's MSN and Google — its biggest Web rivals — may be exploring similar moves.

Google would be a new entrant to telephony, while AOL, Yahoo and MSN have long offered rudimentary phone service using their instant-messaging software and a PC. Yahoo has already expanded its VoIP efforts, having launched a PC-based voice service last year in the United Kingdom in partnership with phone giant BT. Microsoft plans to embed voice calling into its enterprise instant-messaging software. Rumors have swirled about possible Net phone plans from Google as well, plans that would kick off in the United Kingdom.

While none but AOL has yet outlined a clear VoIP strategy, the technology is proving hard for Web portals and search engines to ignore. Analyst firm Halpern Capital on Tuesday said about 115,000 US homes adopt VoIP every month, and about 16 million homes will have VoIP service by 2008. By comparison, there are about 113 million traditional local phone lines, which now use circuit-switched technology dating back about 100 years. VoIP services are typically software-based, requiring little infrastructure to build and maintain.

While that's great for consumers, it remains to be seen whether a VoIP program makes sense for Yahoo, MSN or Google. Yahoo and Microsoft could jeopardise important partnerships with telecom companies if they invest too heavily in voice services. Despite potential risks, all of the portals have begun tentatively checking out VoIP providers to test possibilities, according to sources familiar with the talks.