Google aims at mobile operators' money supply

Ringtone ads to power latest value suction proposition

Posted in Mobile, 21st July 2009 12:09 GMT

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Google's voice telephony service is opening up to more users and revealing how it intends to make the operation pay, while operators are starting to consider what their future holds when everything goes through Google.

Google Voice is a telephony service that provides a single phone number forwarded over existing mobile and fixed infrastructure, but users have noticed it can also be linked to a VoIP service, Gizmo, to further reduce the cost of calls. Meanwhile, Google patents are showing some of the ways the search giant is intending to make money out of telephony.

Linking Google Voice to Gizmo doesn't offer anything that Truphone, Fring or Skype don't already offer: calls routed over Wi-Fi connections (or cellular data) using VoIP. But the weight of the Google brand shouldn't be underestimated and many users will probably sign up to Google Voice with Wi-Fi as an option to follow later - not that the Wi-Fi element is necessary to see a distinct threat to the mobile operators' revenue.

Where a native Google Voice client is used, such as on Android or BlackBerry, SMS messages are sent over the data connection to Google which then forwards them on. In the USA, where received messages still deduct from the tariff bundle, that could mean halving the messaging revenue, assuming popular take-up of the service.

But the operators' loss is Google's gain and some details are emerging of how Mountain View intends to make money from the service.

While Google Voice will charge for international calling - the usual revenue stream for such third-party services - it seems the chocolate factory has bigger plans for the voice service as revealed by the recently-awarded patent application on "Ringback Advertising". The idea is to replace the ringing tone with advertisements, which will also pop up when on hold or using call waiting.

These advertisements can be targeted using demographic data on the caller, and/or the number called: calls to Dominos could play advertisements for Joe's Pizza instead of ringing, which should get the call answered quickly as well as being worth a few quid to Mountain View.

It's certainly an alternative revenue stream, and one that users might tolerate in exchange for a free service - that's assuming the fixed and mobile operators can continue to pay for infrastructure while having their incomes further squeezed. ®

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