Google Buys Global IP Sound

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Google Buys Global IP Sound

global-ip-sound-logo.jpgGoogle has an offer to buy Global IP Solutions, for $68.2 million. Global IP Solutions (GIPS) was the company that powered Skype's adaptive codec to handle packet loss, jitter, etc. until Skype decided to develop their own codec. Google Talk uses GIPS, so certainly Google will save on the licensing fees if they pick up GIPS.

But perhaps the bigger picture is Google Android. GIPS's iSAC codec is now optimized for use in hardware devices, including mobile phones, IP phones, gateways and chipsets to deliver products that offer the same high quality voice experience that users of software-based VoIP softphones have achieves using GIPS' voice platform. (i.e. GoogleTalk, Yahoo!, & AOL are GIPS customers.)

With mobile VoIP becoming much more popular, Google picks up one of the leading developers of an adaptive codec that works well in low-bandwidth or shaky bandwidth situations, such as when you switch from a fast 3G connection to slow Edge connection while driving. Stick GIPS onto Google Android and you get a high quality mobile VoIP experience on par with Skype. I definitely see Google investing more into their mobile Google Talk application if that is the case. Is a video conferencing mobile Google Talk app in the near future?

gips-video-engine-mobile.jpgAlso, with mobile phones adding both front and rear facing cameras, Google can leverage GIPS's VideoEngine, which they launched just two years ago. If you recall, two years ago GIPS partnered with Marvell Technology to ensure its media processing software provides the most advanced mobile phone features on the Marvell chipset and to highly optimize it for the XScale PXA310 devices including the Hewlett-Packard iPAQ series, Samsung's SGH-i780 and Gigabyte's GSmart MS808. The software leverages GIPS expertise in packet loss as well as lip synchronization to ensure a good quality video experience

In additon. the latest version of the GIPS iSAC adaptive VoIP codec, part of the GIPS Soundware voice processing software suite, is designed to deliver wideband quality in both low- and high-bit rate applications. Several IP-chipset manufacturers including Texas Instruments incorporate GIPS's iSAC codec into their VoIP solutions. Although Google's Android phone doesn't use any Texas Instruments chipset, TI has been working on an Android prototype. So it would be interesting if TI and Google partner and offer the GIPS codec on a TI chipset in a future Google Android phone. Of course, Google could just develop their own chipset or go with another chipset manufacturer and put the GIPS codec on it.

"The Web is evolving quickly as a development platform, and real-time video and audio communication over the Internet are becoming important new tools for users," said Rian Liebenberg, Engineering Director at Google. "GIPS's technology provides high quality, real-time audio and video over an IP network, and we're looking forward to working with the GIPS team at Google to continue innovating for the Web platform."

"This is an exciting milestone for GIPS as we join Google with a shared vision to transform and accelerate IP communications," said Emerick Woods, Global IP Solutions CEO. "With Google's global reach, scale and widely recognized leadership, we are confident that our existing customers will continue to be fully supported while we continue to enhance and extend our products and technology at Google."

The offer price represents a premium of 142.1% over the closing share price of GIPS stock (adjusted for the rights issue in GIPS completed in March 2010) on January 11, 2010, the last trading day prior to GIPS making a public announcement of strategic interest from a potential buyer, a premium of 170.8% over the subscription price per share of GIPS stock in the last rights offering completed in March 2010 and a premium of 27.5% compared to the closing share price on 14 May, 2010, the last trading day prior to the offeror's public announcement of its intention to make the offer. Furthermore, the offer price represents a premium of 54.6% compared to the adjusted volume weighted average market price for the last three month period prior to the announcement of the transaction.


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