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Article posted on 08/26/10
Author: Geno Liles



New Google Service Allows Gmail Users
to Make PC Phone Calls


Users of Gmail will now be able to make phone calls to land lines and mobile phones from their computers, according to Google. While the company had already offered computer-to-computer and video chat services, the new feature puts the company in more direct competition with Skype, an internet phone service, and Verizon Communications.

A spokesman for Google said the company would allow users to make calls to the US and Canada for no charge through the end of the year, while very low rates would apply to calls made to other countries. For example, phone calls made by Gmail users to the countries of Japan, China, France, Germany, and England would cost just 2 cents per minute.

Industry insiders say that the new Google service will pose a bigger threat to Skype and other internet-calling services than it does to traditional phone service providers, who have already been cutting rates drastically in recent years to survive in the highly competitive market. Skype was a pioneer in computer-to-computer and video chat communication. Owned by ebay Inc. and several private equity firms, the company is currently in the planning stages on a $100 million initial public offering.

The new Google service, like Skype, is expected to make its biggest splash among US consumers who make international calls, as the majority of consumers in the US already enjoy very inexpensive domestic calling, many having unlimited domestic calling with their mobile providers.

Google says that funds for charge calls would be taken from an online account, which users can load with credit cards. Google stock gained $3.23 to close at $454.62 after the service was launched.

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