Google acquires Gizmo5 in a reported $30M deal

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Google has acquired Gizmo5, a company that makes software for Internet-based calling on mobile phones and computers. The search giant announced the buy on November 12.

While Google did not disclose the financial terms of the deal, TechCrunch reported the sale at $30 million in cash. A Google spokesperson declined comment on the acquisition and referred to the blog post announcing the acquisition.

“While we don't have any specific features to announce right now, Gizmo5's engineers will be joining the Google Voice team to continue improving the Google Voice and Gizmo5 experience,” said Wesley Chan and Craig Walker, group product managers at Google, on the blog post.

Telemarketers have used VoIP as a channel for extending their marketing communications; Google getting into the business could mean expanded technologies. According to the Google blog, Gizmo5 will suspend signups for a period of time, but existing users will still be able to use the service.

Some industry analysts are speculating that the acquisition will put Google Voice in direct competition with Skype, which was recently sold by eBay to a group of private investors for $2.75 billion.

“We think this will have clear synergies with Google Voice and Google Talk,” said Imran Khan, an analyst at JP Morgan, in a report. “Google Talk allows voice calls between users but cannot allow incoming or outbound calls to real phones. Gizmo5 possesses this capability.”

Google has acquired a number of small software companies in the past five years to build its Google Voice offering, including GrandCentral. Since Google acquired GrandCentral in 2007, it has released an upgraded beta version of GrandCentral's VoIP service.


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