Google on Tuesday said it will acquire Global IP Solutions Holding, which makes processing software for voice and video over IP, for $68.2 million. The deal means that Google will own the voice and video conferencing engine behind its competitors' instant messaging systems.
The search giant said it will use Global IP Solutions (GIPS) for real-time video and audio communications over an IP network (statement). Google is paying 27.5 percent premium over GIPS closing price May 14. GIPS trades on the Oslo Stock Exchange.
The purchase of GIPS comes a day before Google's I/O conference. Given Google's acquisition of Gizmo5 and its existing Google Voice service, the search giant appears to be collecting enough assets to give Skype and others competition on the consumer and business fronts. GIPS’s software can also be layered into Google Apps in multiple areas as a business collaboration tool.
GIPS' software is installed in more than 800 million endpoints and the company touts integration with unified communications tools from the likes of Avaya and IBM. The company's software allows for video and voice processing, unified communications, fixed mobile, voice and video conferencing and enterprise IP telephony.
One interesting thing to note about GIPS is its customer list. On its site, GIPS touts Yahoo, IBM Lotus, AOL, WebEx and Baidu as customers. All of those companies compete with Google products. For instance, Yahoo uses GIPS VideoEngine PC product to deliver real-time voice over Yahoo Messenger. Is that really going to last when Google owns GIPS? It's the same story for AOL Instant Messenger. Simply put, Google will own the technology powering video and voice on the biggest IM clients. On the Google Apps front, WebEx uses GIPS VoiceEngine and so does Lotus Sametime. On the China front, Baidu also uses GIPS technology.
In a letter to customers, GIPS CEO Emerick Woods said:
Google has been a valued customer of GIPS for many years and has greatly contributed to the development and innovation of our products to date. We have always respected their position in the industry and share the common vision of accelerating next generation innovation in the web-based solutions for real time communications.
You may have many questions regarding this announcement but for now, until the successful completion of the offer, it will be business as usual for us here at GIPS. You will continue to interact with the same team members and can expect the same level of support and commitment that you have received in the past. Google has informed us that nothing will change for current and prospective customers of GIPS. Following the completion of the Offer, Google intends to continue servicing GIPS’s customers in accordance with existing contracts while offering them the opportunity to transition to new offerings developed by Google. Although we will not have more significant details until the process is complete and full integration efforts are underway, we will keep you informed throughout as events arise.
In other words, Google will continue servicing GIPS existing contracts, but after that rivals may be on their own.