Google Acquires Global IP Solutions: Furthers Ambitions towards Unseating Skype

In a move that barely registered on the tech radar, Google announced earlier this week that it has acquired the Swedish Internet audio and video communications company Global IP Solutions (GIPS) for $68.2 million, a purchase made possible, from Google’s perspective, by the simple fact that its CEO Eric Schmidt finally decided to clean-up the loose change that had fallen behind his couch cushions.

While the scale of this deal barely registers as a blip on Google’s financial statements, the importance of the acquisition of GIPS lies not in the price, for even with the 142% premium Google paid for GIPS stocks the company wasn’t worth much, but in the bigger picture. So what’s Google’s interest in GIPS? Early speculation suggests that not only will GIPS’ technology help Google advance its VoIP and video options for its innovative Android OS, but that it may also be a piece in Google’s plan to compete with the likes of Skype in the global VoIP market.

Although all this remains speculative, it’s clear to me why Global IP Solutions would be a target acquisition for Google, for despite the Swedish company’s relatively small size—especially in light of a customer base that boasts the likes of Samsung, IBM, Cisco, and Google itself—the technology it produces is clearly on the cutting edge.

The draw of GIPS’ technology is that it’s fairly easy to integrate into almost any application, and is currently deployed, reports indicate, in over 800 million end-points. Simply put, the software is designed to help deal with issues like packet loss, echo, and delay, and for anyone familiar with the telecommunications sector, these are certainly major issues for any company looking to provide real-time communications services to its customers.

GIPS is quietly known in the tech world for developing easy-to-use VoIP and video conferencing technology, and in the last month alone the Swedish company has seen its VoiceEngine Mobile software added to LG’s Fixed Mobile Convergence bundle, a move that LG stated was crucial to improving the overall quality of voice calls, and has seen a deal struck with Cisco’s WebEX unit to improve the telecommunications company’s videoconferencing services.

Beyond this, GIPS has been working with Motorola to develop video chat for the Android OS, and also boasts videoconferencing technologies that are utilized by both AOL and Yahoo. All this to say, for a small company, GIPS has some pretty big friends and some pretty big ideas. While it’s clear that these companies most likely signed with GIPS because of its impending acquisition by Google, these deals offer a tantalizing glimpse into what Google may do with its new VoIP and video brand.

With the acquisition of GIPS, not only is Google assembling the tools to increasingly develop the VoIP technology of its innovative Android OS, but, as speculation suggests, Google may be gathering the pieces to compete directly with leading VoIP carrier Skype.

While I sincerely doubt that Google will have any immediate success in unseating Skype as one of the world’s leading VoIP providers, especially with Skypes global brand recognition and some 400 million satisfied users, clearly GIPS will help the search engine giant improve its own software like Google Voice, Talk, and Office Apps; for if there’s one thing that tech users are crying out for these days, it’s enhanced and integrated multimedia functionality.

So while Google’s true intentions remain a secret, I can almost guarantee that in the very near future the entire picture will come into focus. Just remember, it was only a few short weeks ago that, with its acquisition of Palm, we got the first glimpse of HP’s ingenious multipoint mobile development plan, and I’m sure that Google’s strategy will be the same.

Tagged as: Android, AOL, Eric Schmidt, google, Google Talk, Google Voice, HP, Video Chat, Yahoo