Company edges toward multimedia communications platform with Google Talk offering
Google Inc. introduced two applications last week that accelerate the company's evolution from an Internet search provider to a multimedia communications company. Google Desktop 2 updates its desktop search software with new personalization features, while Google Talk is a downloadable Windows application for instant messaging and PC-to-PC voice calls.
Google Desktop 2 isn't a radical departure from its earlier iteration, but its focus on personalization reflects an expansion of Google's offerings beyond finding information to creating and sharing it. Personalization keeps Web-portal users from slipping away by adding value to the generic aspects of communication. And it also makes users more likely to avail themselves of Google's other applications and services such as Gmail, Google Maps, Google Talk, Google Video, and Blogger.
Google tries to innovate in different areas, CEO Schmidt says.
Google Talk fills an obvious competitive gap for Google. America Online, Microsoft, and Yahoo all have instant-messaging offerings. And the software should bring more users to Gmail, since a Gmail account is needed to use it. Google Talk also represents a challenge to other IM services, since it doesn't force ads on users, unlike AOL Instant Messenger, the leading IM client.
Together, the applications help define Google's direction. "We're very careful to say we're not trying to build one thing," CEO Eric Schmidt said in an interview with InformationWeek in May. "We're trying to innovate in all these interesting spaces. Every innovation is end-user tested, and, as they become more and more widely adopted, we figure out interesting things to do with them."
That may work well for Google's engineers, but investors are eager to see a management plan to diversify its revenue stream beyond online advertising. So far, the plan has looked a lot like throwing products and services at the network and seeing which ones stick.
Google Talk lays the groundwork for Google to move beyond the Internet and onto the telephone network. Google Talk can handle only PC-to-PC voice calls, but if it added the functions of an Internet telephony company such as Skype Technologies SA--by acquisition, partnership, or in-house development--it could quickly let Internet callers reach beyond computers to telephones.
It seems likely that Google harbors telecom ambitions. In January, the company said it was seeking a strategic negotiator with experience in "identification, selection, and negotiation of dark-fiber contracts both in metropolitan areas and over long distances as part of the development of a global backbone network." It has resources; with almost $3 billion in cash, Google plans to raise $4 billion more in a second stock offering.
Google also is committed to open standards and interoperability with other networks, says Georges Harik, director of product management. Other consumer IM networks --AOL, Microsoft, and Yahoo--have shunned interoperability as a threat to revenue and platform control, says JupiterResearch analyst Joe Wilcox. Microsoft, for example, makes money by selling customized IM avatars, he says, and Microsoft and Yahoo tie their music services to their IM clients.
The wild card is whether Google's adoption of the XMPP/Jabber open-standard protocol for its IM network creates an infrastructure that offers revenue opportunities for third-party developers. Assuming a significant user base for Google's IM network, independent developers may add enough cool features to Google's platform that other IM players decide they want in on the open-standard protocol.
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