Google is Not Killing Voice

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Google is Not Killing Voice

Everywhere you look, people are aghast that Google added free calling to Gmail. Big deal. (Although you should read Jon Arnold's piece on it.) Most people aren't going to strap a microphone and headset to their computer to make PC-to-phone calls.

Isn't Skype the only one that this really affects? If this kind of calling - PC-to-Phone - was common, Skype would be worth billions (and Cisco couldn't afford it).  Net2Phone, Dialpad and others offered some kiind of PC dialing. It's clunky. People want what they are used to.

Another example is MagicJack. How many thousands of those USB devices have been sold via infomercials? And yet the landline decline is still about the same. No tipping point yet.

Vonage tried to be the voice killer, but had too many issues - legal and technical. Now it's back with an app to let you call your Facebook friends. One more click-to-call widget that likely will not have that much impact on voice revenues.

You know who is killing voice revenues? Cable companies. Why?

Cable started with the most expensive piece of triple-play: TV. While TV is profitable, the head-end and gear to deliver it is very expensive -- and so is the content. As we have seen with the fights between BHN/TWC and ESPN, content is wicked expensive with carriage and bundling rules designed to enhance the content owners pockets.

Meanwhile, MSO's realized that Internet Access was easy to provide and way more profitable than TV. Now they realize that voice is the golden goose of profit. Cablecos also realize that this is the cash cow of their competitor, the ILEC. Destroy its cash cow before it can build out a threatening network. (See FiOS history).

On the other side of the duopoly, telcos, specifically ILECs, had to migrate its business from the most profitable to the least profitable while spending billions on network builds and TV gear.

MSO's have really only figured out how to do landline replacement. When they figure out how to deliver Hosted PBX successfully to businesses, ILECs and CLEC's will be reeling from that punch in the market.

ILEC's were not prepared for competition. Most ILEC's have a Bell-Head mentality and cannot wrap their heads around the concept of innovation, flexibility and competition. Also, ILEC's are good at picking hardware/technology. Most haven't had but a couple of vendors for over 50 years (Lucent and Nortel). And that DMS or Class 5 has been sitting there printing money ever since. Today, it's a scramble to figure out Video Delivery Systems and high-speed Internet Access services - while spending money on network build out as well. Not fun, especially as revenue dips.

BTW, what is saving Ma and Pa Bell is cellular and International or both would be seeing bloody red quarters like Pa has.

Anyway, back to Google Voice in Gmail. The reason Google did this is the same model that hotels use: stay on property. Hotels get you for the room, but then add a resort fee, parking, the expensive bottles of water, mini-bar items, gift shop, snack shop, bar and restaurant. As long as you stay on property, they are grabbing as much of your vacation spend as possible.

Google has the same mentality: keep people on their properties as long as possible. Search, Docs, Apps, GTalk, YouTube, Blogger and Gmail. The last property for them to monetize properly is Picasa. Pictures should be as social as YouTube is (at a minimum).

Can't wait for a click-to-call widget for Blogger!

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