Updated from 12:33 p.m. EDTGoogle ( GOOG) has thrown off the gloves and will now take on the entire phone industry. With one new phone number and a host of management features, Google promises to give users free calling and one-stop control over most voice and text messages. The service introduced Thursday is called Google Voice, and it takes aim not just at Internet calling shops like eBay's ( EBAY) Skype and Vonage ( VG), but it also threatens to speed up the decline of Verizon ( VZ) and AT&T's ( T) core business as well as cut into the fledgling calling services from Comcast ( CMCSA), Time Warner Cable ( TWC) and Cablevision ( CVC). Google has been developing the service it acquired with GrandCentral two years ago and has tailored the functions as much to mobile phones as to conventional land lines. If successful, the service would gain an edge on telcos and cable companies, which have yet to deliver a popular comprehensive calling and messaging product. Google Voice is designed to allow users to check messages on several phone accounts, read voice messages converted to text, send text messages, call within the U.S. for free, and access free directory information. In other words, bypass the phone company. The big search shop already has a booming email service in Gmail. Through Gmail, it has been offering its own instant messenger and video chat service. By adding a call and message manager, Google threatens to have a comprehensive communications platform to rival Skype and jump well ahead of the phone companies.
The move brings Google one step closer to fulfilling a prediction made nearly 11 years ago by Cisco CEO John Chambers. "As the majority of load on the network becomes data and video, voice will become free. First, it will commoditize, then, literally, it will become free," said Chambers. The statement that voice will be free, which came during a Sept. 1998 speech to the Congressional Interenet Caucus, set off alarms among telcos making handsome profits off per-minute calling charges. The future challenge now, of course, is how Google will make any money off a service with a $0 price tag. Google shares were up 1.5% to $322.60 in recent trading.