Video Chat Behind Google Buy

Video chat probably is the top reason Google has bought Global IP Solutions.

Google Buys GIPS

Google is acquiring Global IP Solutions for about $68 million in an all-cash deal for the firm whose technology is used to reduce delay, jitter and echo in real-time audio and video on the Internet.

“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. “GIPS’s technology provides high quality, real-time audio and video over an IP network, and we’re looking forward to working with the GIPS team at Google to continue innovating for the Web platform.”

GIPS technology is widely used. In fact, Global IP Solutions bills itself as the world’s most widely deployed technology for processing real-time voice and video over IP networks, used by over 800 million end-points. As is always the case when a widely-used "original equipment manufacturer" is acquired, Google will have to balance use of the technology in a "captive" mode as well as supporting the product as an OEM offering for many third parties, some of whom may be Google competitors.

As well as providing technology that allows users of Yahoo Instant Messenger to make voice calls, GIPS technology also powers voice calls for Cisco’s WebEx system and voice and video technology for IBM’s Lotus Sametime, for example.

Google already has some voice services, including Google Talk, Google Voice, and video and voice chat on Gmail. It expanded these services last year with the acquisition of Gizmo5.  The GIPS acquisition will allow Google to create more powerful voice and video services, both for the consumer and enterprise.

Inevitably, the deal is going to raise more questions about whether Google plans to compete more directly and robustly with Skype and other IM-based services. At one point, telecom service providers might have taken the acquisition as a sign Google planned to compete more directly in the basic voice business. These days, most executives seem more resigned to changes in the voice market that are only indirectly related to "Google becoming a service provider."

The same GIPS technology that makes IP voice perform better also make IP video work better, and that may be the more-important part of Google's thinking.