In the 2006 RTC report which we released in Q4 last year, we talked about "MA Google" i.e Google as a large telecommunications vendor, based on some of the recent acquisitions they have made.

In talking with Mike Jazayeri, the GoogleTalk Product Manager last fall, he said, “GoogleTalk is a natural extension of g-mail, and our goals with GoogleTalk were to provide a high level of voice quality, provide a simple and easy-to-use interface, and be able to integrate with e-mail.” CS believes GoogleTalk meets those goals... but there is more!

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Jazayeri felt that in most organizations, there are “islands of communication” and Google’s goal is to look for ways to unify communication/collaboration, both within the organization and across the current islands of IM (AOL, Yahoo!, MSN, etc.). Google’s philosophy is to focus on open standards and communication. They do, and will support H.323/324; since they are using Jabber as the technology underlying GoogleTalk, they currently support Jabber/XMPP and can connect to AOL/ICQ, Trillian, and a few other clients who also support XMPP - but not Microsoft (MSN), which is session initiation protocol (SIP)-based. Recently Google announced an "Open Talk" initiative that allows other XMPP-based services to connect to Google Talk.

When questioned about SIP, Jazayeri said that in the future Google would support SIP/SIMPLE (SIP instant messaging and presence leveraging extensions). But as of Q1, 2006 this has not yet been announced, however, CS expects this announcement in Q2.

Google's big idea to unify IM/presence is to do back-end (server-side) federation; currently, most of the solutions (like Trillian, Zon (SiteScape), or Gaim (open source) or MSN) are client-side. It is possible that Google might get Yahoo!, and definitely AOL (based on their recent year-end 2005 agreement), to agree that g-mail users would get access to AIM at the server level (which is kind of like letting the wolf into the hen house), but it is doubtful that Microsoft will let GoogleTalk connect to their servers.

Along with the announcement of GoogleTalk, Google also announced that they are working with Earthlink and SIPhone. These are not major players, but it is a step in the right direction.

Google’s goal is to support a variety of audio coder/decoders (codecs); today they support PCMA, PCMU, G.723, and iLBC. Google also supports codecs from Global IP Sound: ISAC, IPCMWB, EG711U, and EG711A. Google is also evaluating the Speex codec. A natural next step for Google would be to move into video conferencing. Although they would not talk about this, when asked, our analysts know they are currently in conversations with several video codec vendors, and CS anticipates some sort of announcement around this probably early in 2006, again probably in Q2.

Google's new partnership with VoIP, Inc. a Net phone provider (VoiP) also adds fuel to the fire for Google as a communications giant. Google claims is only to test a single feature known as "click-to-call." Based on this we can see a new class of Google ads that have a "click to call" button at the bottom of them. Knowing Google, they will probably make advertisers bid for the addition of this button, and put in a new (higher) pricing category of Ad Words to support this additional functionality.

However, appealing "click to talk" for ads is to Google, there is a lot more to VoIP and many of Google's competitors are already taking much more advantage of VOIP to provide converged video, voice and data into a single Internet connection. This means that Google could be now offering free video calls, voice mail, conference calls, call forwarding, "find me call routing" and many other VOIP features.

Even more lucrative would be a Google-to-phone connection, allowing people doing a Google search to make a call from their personal computer to someone found in one of the search results. Or, better yet, there could be G-Phone, a low cost unlimited local and long distance phone service that's available over any Internet connection. A great way for Google to compete with both Skype and Microsoft.

Expect to see more on the communications front from Google in the next few months. Let us know your opinion? do you think Google will become the next communications giant?