Wednesday, August 24

Google goes shopping... will it run into Skype?

Gadda is making quite an insightful speculation on what Google might want to do with the proceeds from their $4 Bill secondary offering on our Quasters Blog. In my comments to his post, I mention that there is a good bet on Skype. The hype surrounding Skype's purchase is sky-high right now as you will read on Om Malik's VoIP blog as well as many others.

There are several candidates for GOOG to swallow. My feeling is they are looking for the best value for money. And currently that is available in privately held startups which have good success record and/or promising technology. Vonage falls in that category. But the problem I see in GOOG trying to purchase Vonage is the fit, or lackthereof. Vonage is a high tech company in a low-tech service. Telephone service provided by Vonage is for the masses, not for the tech-savvy. A huge part of their success is the simplicity of their solution. Google, IMO is a company that appeals to techie, geeky, "what else can I do with my PC" kinda people. The converse is also true. There is nothing in Vonage that fits within this philosophy. Besides, the biggest proble IMO, is that Vonage does not have a clear technological competetive advantage.

Skype on the other hand would be a great fit within the GOOG universe. It is P2P, PC-based, software-based, appeals to the tech savvy, "i want more free" and "what else can I do with my PC", kinda user, right in Google's ball park. That said, there are some who do think Skype is not GOOG's type.

Another player that comes to mind is Asterisk. This is an open source IP-PBX software and would fit in well with GOOG's philosophy. Asterisk itself is Open Source though, so an acquisition of Asterisk is out of the question. But Google may show interest in Digium which is the company that employs Mark Spencer, the creator of Asterisk. It is quite a far shot, but if it happens, this would be huge for a small company like Digium and for Mark Spencer himself. He has a big fan following in the open-source VoIP community, sort of a legend.

A search company in the media domain that comes to mind is Blinkx TV. They have beaten GOOG at its own game and have had a lot of succes with TV and Video Search. This combined with TiVO (Personal video Recorder) will be a great match for people to search their own recordings and/or Electronic Program Guides (EPGs) for video content they want to watch.

Another search company that comes to mind is Technorati. It is an invaluable resource to help search for "tags" through over a million Blogs. Search is always going to be Google's playground and GOOG may have gotten smitten with the success of these two startups.

It is also possible that Google may be looking to make multiple acquisitions to enter into the triple/quadrupple play market. Convergence is the name of the game and Google might want to get a foot in before its too late.


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