Google opens new line to internet phone calls

All the fuss about tweeting, texting, Facebook pokes and various other cutting-edge forms of communication can obscure the fact that old-fashioned telephone calls are still a pretty effective way of conveying information. But the 560 million people who are registered users of internet phone pioneer Skype have never forgotten the value of talk, and now it seems that Google is realizing it, too.

The web search company, which has already carved out a formidable presence in the smartphone market with its Android operating system, is now launching a calling service directly into its popular Gmail service.

After announcing the service Wednesday, Google is gradually rolling it out to users this week across the US.Initially limited to the US, the service is called Voice Calls from Gmail and allows users to call any landline or mobile phone in the country for free via their computer. Google said Thursday that even the limited number of users who had access to the new feature managed to place one million calls in the service's first 24 hours.

The company is not saying how long the free lunch will continue - but for now it guarantees the no-cost calling until the end of the year. Calls to international landlines are as cheap as two cents per minute to Britain, France and Germany, though rates increase sharply for calls placed to mobile phones in those countries.The new service might have traditional telephone companies and Skype quaking in their boots, but according to Goldman Sachs analyst James Mitchell, they are not the primary target of Google's innovation.

"We assume Google's ulterior motive is less about disrupting the telecommunications and more about driving engagement within Gmail and its social-networking activities, to better compete with social networks such as Facebook," Mitchell wrote in a note to investors.

Still, with Skype planning a $100-million initial public stock offer later this year, the entrance of Google into the fray cannot be encouraging.

Privacy advocates are also wary.Google already transcribes voicemails for users of its separate Google Voice service introduced earlier this year - and it may not be long before Google starts selling keyword ads for your phone calls the same way it does for your emails.

The new service is not as powerful as Google Voice, which gives users a new phone number to which they can route all their existing calls. Unlike Google Voice, which connects you phone to phone, the new feature only connects computer to phone.But analysts like David Pogue of The New York Times are already counting the days until Google introduces Gmail calling as an app for Android phones and iPhones.

"At that point you could for the first time in history make unlimited free phone-to-phone calls," Pogue enthused.PC World business guru Tony Bradley thinks that the growing number of businesses that already use Google Apps for email, spreadsheets and other office functions will find the new service both convenient and efficient.

Even better, the service will quickly improve as it irons out the bugs and benefits from competition. "As Google and Skype and any other VoIP competitors gain momentum," Bradley noted, "I am sure there will be more innovation and aggressive marketing to try and establish dominance."