March 12, 2009

Google has strengthened its mobile services with the debut of a service called Voice that could be a challenge to Skype and other phone firms. It lets customers make cheap international calls and gives them a speech-to-text feature for voicemail. The services are available thanks to Google's acquisition of phone firm GrandCentral which gives users a lifelong universal phone number. "This could be big. Google is seen as disruptive," said analyst Jon Arnold. "They are a wild card in telecoms and wireless but this is Google and they are very smart at what they do.

"The core of Google's business is search and for a long time the industry was concerned about the GrandCentral acquisition. What was the fit? What was the motivation? It will be interesting to see where they ultimately go with this," said Mr Arnold, principal of analyst firm J Arnold & Associates. Google Voice is the first major update to GrandCentral, which Google bought for an undisclosed sum, thought to be $50m (£36m) in 2007.

The service gives subscribers one number that lets them route all their phones through - home, office and mobile. Users also get a single voicemail account regardless of which phone messages are left on. Google Voice is the latest attempt by the company to reach out beyond online search and advertising. Domestic calls will be free but international calls will require users to set up a Google Checkout account. Calls to landlines in the UK will cost 2 cents per minute.

EBay's Skype offers free domestic and international calls made over the internet from one computer to another, but there is a charge to landlines and mobile phones. Skype president Josh Silverman told analysts and investors that "chat and voice will become table stakes". He also revealed that the company is adding 350,000 new users a day and is on track to do more than 100 billion calling minutes in 2009 alone.

Google does not view the service as a threat to Skype or other telecom companies any more than its Google Talk offering, which lets users chat over the internet for free. "This is about allowing your existing phone to work better," said Craig Walker, now group product manager for real time communications at Google and co-founder of GrandCentral. "It's not that we are replacing your phone, we are giving [it] the ability to work better," he said. He declined to say how many users had signed up. Google Voice is currently only available to former GrandCentral users.