Google Gets the Message

As Yahoo! (YHOO) strengthens its ties with old-line telcos, Google (GOOG) is exploring other routes into the communications future.

The Mountain View, Calif., Internet-search giant's plan to raise $4 billion through a stock offering has helped feed speculation over where the industry leader will next try its deft hand.

Where some industry observers like Business2.0's Om Malik predict Google will build a nationwide Wi-Fi network, others expect Google to beef up its video-player service to deliver streaming clips and video blogs.

The most recent development is Google's release of a voice-enabled instant messenger service called Google Talk.

The talking IM service will compete with voice-over-Internet protocol, or VoIP, services like Skype. And if popular, Google Talk eventually could threaten the multibillion-dollar calling businesses of cable and phone companies.

Taking the IM path builds on Google's recent foray into email called Gmail, which has challenged established players like Microsoft (MSFT), AOL and Yahoo.

"The next step is the messenger market," says ABI research analyst Vamsi Sistla. "Online messaging services will play a quintessential role in communications and media. It makes sense for them to launch the service. I think it will pave the way for a lot of other opportunities."

Meanwhile, copying an existing SBC (SBC) promotion, rival telco giant Verizon teamed with Yahoo! Tuesday to offer a slower version of its digital subscriber line, or DSL, fast Internet service for $15 a month.

The move was seen as way for the New York phone giant to win customers away from rival dial-up services like Earthlink (ELNK) and increase its share of the broadband market, which is still dominated by cable companies led by Comcast (CMCSA) and Time Warner (TWX).