Google Expands Video Conferencing and VOIP with GIPS Buy

By Leah Gabriel Nurik  |  Print this article Print

Google's purchase of VOIP provider Global IP Solutions (GIPS) is the search giant's fourth VOIP and video related acquisition in two years. GIPS has inked deals with Cisco to integrate with its WebEx application for video conferencing, plus it will give Google the capability to offer video chat over Android-based smartphones.

Watch out, Skype and other video conferencing vendors, Google (NASDAQ: GOOG) is at it again. On the heels of three other VOIP- and video-related acquisitions, the search giant laid its intentions to rule the VOIP and video market on the table with its bid to pay $68.2 million for VOIP technology provider Global IP Solutions (GIPS).

GIPS is a VOIP and video conferencing technology company with meager revenue (2009 revenue was $12.06 million with a full-year net loss of $6.95 million), but a big focus on Google’s Android operating system. GIPS made some significant Google-related moves this year, including one last week that had its technology set to be embedded on Motorola’s Android phone. Also, in April, GIPS became the first to offer voice chat on Android.

In non-Google related deals, the company struck an agreement with LG wherein its technology is to be used in LG’s Fixed Mobile Convergence bundle to improve the quality of voice calls. The company also inked a deal with Cisco (NASDAQ:CSCO) and its WebEx division for video conferencing.

GIPS technology is also used as the backbone in a variety of voice messaging platforms that compete directly with Google, including Yahoo (NASDAQ:YHOO) and AOL (NYSE: AOL).

So why is this acquisition important? First, it means that Google will own the technology behind its competitors’ chat applications, and that’s good news for Google that speaks for itself. Also, last month, Global IP Solutions announced that it was going to be introducing some new features targeted at Android developers to easily integrate video conferencing into their Android applications.

The acquisition will also give Google the ability to offer video chat through Android phones, boost call and video quality on services like Google Chat and Google Voice, and possibly expand those capabilities beyond just Android.

This is the fourth video and VOIP acquisition by Google in two years. At the end of last year, Google bought VOIP provider Gizmo5 for $30 million aiming to improve its native Google Voice application. Prior to that, the company added On2 for open-source video code called VP8, and also a company called Grand Central for its Google Voice routing service.

"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," said Rian Liebenberg, engineering director at Google, in the press release.