Buy could help company compete with Skype

Google on Thursday officially confirmed its acquisition of the VoIP company Gizmo5. Unnamed sources leaked the information earlier this week, including the alleged $30 million price tag. The startup initially had been eyed by Skype, however the deal never materialized.

The acquisition has lead to speculation that Google is planning to take on Skype and dedicated phone companies. The search giant could combine its free phone-number service, or even Google Talk, with Gizmo5's VoIP calling system.

Gizmo5 is no longer accepting new subscribers for its $6/month service, although it will relaunch after the transition. The service boasted cheap calls to anywhere, no per-call connection fees, and integration with Google Voice accounts.

"We've acquired a number of small companies over the past five years, and the people and technology that have come to Google from other places have contributed in many ways, large and small, to all kinds of Google products," Google wrote on its blog. "Since the GrandCentral team joined Google in 2007, they've done incredible things with Google's technology and resources to launch and improve Google Voice."

Google and Gizmo5 have yet to disclose how their respective technologies will be integrated.

By Electronista Staff

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Investor, industry, Google, VoIP, Skype, buyout, acquisition