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Telecom Equipment - Monday, November 9, 2009

Google Advances Competition With Skype With Purchase of Gizmo5

Gizmo5 has been bought by Google for an undisclosed amount, although some sources put it at $30M and others call it $50M. San Diego-based Gizmo5 (fka SIPphone) was founded by CEO Michael Robertson of Mp3.com fame.

Gizmo5 is a web based calling service similar to Skype. Advanced users had connected Gizmo5 with Google Voice online calling service to create a free unlimited incoming and outgoing phone service. When Google bought Grandcentral and made it Googlevoice, the integration to Gizmo5 was interrupted. Its a bit complicated but Google Voice already provides free incoming and outgoing calls, except you must provide your own phone number to initiate or receive the call. Recently, it became possible for users to get a free Gizmo5 number to serve as their phone line to receive or make calls on Google Voice by configuring Gizmo5 to automatically accept and make phone calls without any need to purchase calling credits.

Free wireless telephony via Google Voice is now getting closer to reality, which is interesting given Google's big purchase of Admob's mobile ad platform today.

A lot of the reports that we are seeing are referring to this as speculation by TechCrunch as Google has not yet confirmed the deal. However, as we look on Linked in we see at least one profile of Gizmo5 employees who say that Google bought the company.

Gizmo5, which was founded in April 2003, has raised $6M, plus an unspecified amount from Michael Robertson. Some sources say that Gizmo5 has raised $20M to date. Gizmo5 says it has 5M users, so not huge, and who knows how many of those are active.

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