Google to buy VoIP, videoconferencing company

Heads up, Skype: By acquiring Global IP Solutions for about $68 million, Google expects to improve its audio and video communication abilities.

In an apparent effort to improve the services it can offer online, Google is seeking to acquire Global IP Solutions (GIPS), a company specializing in Internet telephony and videoconferencing.

Google and GIPS announced the move Tuesday morning, saying Google offered to pay $68.2 million, a premium of 27.5 percent over the most recent trading price and of 142 percent from January 11, when GIPS announced interest from a strategic partner.

"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, an engineering director at Google, in a statement. "GIPS' technology provides high quality, real-time audio and video over an IP [Internet Protocol] network, and we're looking forward to working with the GIPS team at Google to continue innovating for the Web platform."

GIPS' board has recommended that shareholders accept the offer, and some large shareholders, including Kistefos Venture Capital AS and Kistefos Venture Capital II DA, have "irrevocably committed to accept the offer with respect to approximately 50 percent of the outstanding shares and votes of GIPS," GIPS said.

The announcement comes just a day before Google begins its Google I/O conference, an event devoted to the idea of making the Web the foundation for much more than just static Web pages. Although Google's cash cow remains search advertising, it's also seeking other revenue sources, and subscription services to Google Apps customers is one upcoming billion-dollar revenue opportunity, Chief Executive Eric Schmidt has said. Gmail, which offers some video chat technology today, is a core part of the Google Apps service.

Google already has some voice over IP (VoIP) technology through its acquisition of Gizmo5 and its Google Voice service. Acquiring GIPS could expand Google's capabilities, exerting new competitive pressure on existing telecommunications powers as well as upstarts such as Skype.

Update 5:42 a.m. PDT May 19:: GIPS is headquartered in San Francisco, with offices in Stockholm, Boston, Korea, and Hong Kong, but its stock trades in Norway. Its customers include Cisco, Nortel, Oracle, WebEx, Yahoo, Samsung, CommuniGate, Nimbuzz, Telekom Malaysia, TelTel, and AOL. Some of these customers include the real-time communication technology in their own products, as in the case of Yahoo Messenger.

 

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