Google One-Ups Skype With Nokia Partnership

— May 25, 2006

Google may be moving deeper into Skype's Voice over Internet Protocol (VoIP) territory, with a little help from Nokia.

The Finland-based personal communications device maker is adding Google Talk to its soon-to-be-released handheld Internet browsing product. The partnership could help Google extend its reach into mobile communications.

Specifically, Nokia plans to pre-load Google Talk on an upgraded version of its Internet Tablet. Google Talk enables users to call or send instant messages to their friends at no charge.

"Clearly, Google's trademark is about offering a bunch of different services for free. The more features and functions Google offers, the better chance it has to attract more customers," IDC analyst Will Stofega told TechNewsWorld. "More customers tend to drive more eyeballs, and more eyeballs drive ad revenue. That's what Google is about."

So, what's the Google twist that could put VoIP players like Skype and Vonage on the defensive? Nokia's new device taps into the potential of Wi-Fi instead of the cellular phone network.

Wi-Fi hotspots are springing up across the United States in coffee shops, hotels, airports and other public areas. The wireless network allows users to log onto the Internet and receive emails while on the go.

The Google Talk-enabled Nokia device allows users to make calls either by talking directly into the device like a walkie-talkie, or by attaching a headset for hands-free operation. Users can make calls to others who have Google Talk software installed on their personal computers or handheld devices. The application is not currently designed to allow users to make calls to regular phones.

Wi-Fi, which is becoming a popular alternative to cell networks, will provide the infrastructure for the calls. Vonage is currently offering its VoIP services on a mobile phone over Wi-Fi. Skype plans to launch a similar service this year, but Google will beat it to the punch via its Nokia partnership.

Skype has a strategy similar to Google's, i.e., frequently adding low-cost features and services to attract new users. It has worked well for Skype. The Internet telephony company has leveraged its multimillion-member subscriber base to strike partnerships with companies like EMI, tapping its library of ringtones.

"Skype has a well established user base of customers -- right now they are talking about 100 million downloads. That's a nice number to bring to potential partners to create synergy," Stofega said.

However, Skype didn't cut the deal with Nokia. Google did. Its Google Talk will reside on an upgraded version of the Nokia 770. The upgrade is expected to be unveiled on Tuesday at an event in Sweden . The original Nokia 770 Internet Tablet features a high-resolution, 4.13-inch widescreen display with zoom and on-screen keyboard.

The Nokia 770 Internet Tablet also boasts a Web browser with flash player, an email client, Internet radio and a news reader, as well as a file manager and media players to enable users to take their favorite Internet services with them on the go. Nokia is reportedly talking with other yet-to-be-revealed partners, and will be adding their Internet communication software to the devices as well.

Besides via Wi-Fi, the device can connect to the Internet using Bluetooth wireless technology with a compatible mobile device. Nokia's new offering is expected to sell for about $390.

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