Gizmo5 Gives Google More Voice | Is Google on a Spree?

Another big purchase for Google

Google seems to be having no problem deciding what to do with its money.

Google seems to be having no problem deciding what to do with its money.

Four days after Google announced it is acquiring AdMob, a mobile advertising service, for $750 million, Google announced it will acquire Gizmo5, a voice-over-IP service. I guess that’s what happens when you don’t have to talk to a loan company in order to buy out other businesses. Google announced yesterday it will buy Gizmo5, and the acquisition is rumored to cost $30 million. This has led some publications, including PC World, to say Google is on an “acquisitions shopping spree.” I think that’s a ridiculous thing to say, and I’ll explain why later.

Gizmo5 users and Google Wave users have started to take notice of this most recent purchase, which marks Google’s 57th acquisition. Gizmo5 has been added to the list of services available through Google Wave. However, while previous Gizmo5 users can continue to use the service, no new customers can sign up for now.

What does Gizmo5 do?

Gizmo5 works like the more popular voice-over-IP service Skype. It enables people to speak to each other through their computers as though they’re talking on the phone, plus it has video capabilities.

There’s no word on when Google will start taking on new Gizmo5 customers, but the service will be called Google Talk now that it belongs to Google. Now, instead of providing ad-on features for VOIP systems, as Google Voice did before, Google will provide the calling backbone through Gizmo5.

Previous Google acquisitions

PC World’s statement that Google is on an acquisition spree was also based on the fact that in September Google took over a computer security company, reCAPTCHA. that acquisition was small potatoes for Google, but in August it paid $106 million for On2, a video compression technology company. Other huge Google acquisitions include AOL, which it bought for $1 billion in 2005, and YouTube, which it paid $1.65 billion for in 2006.

So here is why I think it’s ridiculous to say that Google is on an “acquisition shopping spree” because it bought four companies this year. In 2007, Google acquired 16 companies. In 2006, it bought 10. In 2005 it bought 11 companies. Sure, it has purchased more companies this year than it did last year. In 2008 Google only bought two companies. Still, it seems to me that Google is slowing down big time on its acquisitions, not going on a “spree.”

In June and July only in 2007 Google acquired seven companies, including Feedburner for $100 million and Postini for $625 million. Now that was a spree. Also, during that time period, Google spent $45 million to buy GrandCentral, the VOIP business that now has led to the purchase of Gizmo5.

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