Google Acquires Gizmo5

Google said Thursday that it had acquired Gizmo5 Technologies, a startup offering Internet telephony software for mobile phones and computers. The acquisition puts Google in a position to offer an Internet phone service similar to Skype.

While Gizmo5's technology allows people to make low-cost or free calls using software on their computers, it also makes similar software for use on mobile phones.

Google plans to integrate Gizmo5 into Google Voice, which provides users with one number they can use on multiple phones. Terms of the deal were not disclosed, and no specific product announcements were made as a result of the acquisition.

J.P. Morgan Analyst Imran Khan wrote in a research note that Gizmo5 gives Google an open standards-based online calling system.

"We think this allows Google to compete head-on with Skype, as this supports IM and VoIP calls, allowing users to chat with friends on Gizmo5, MSN, AIM, Yahoo and Jabber," Khan writes. "Users can also make video calls through the desktop version, share files from their mobile phone or computer, and send SMS messages directly from their Gizmo5 account."

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