|NEW YORK (Reuters) ? Google Inc said users of Gmail will now be able to call telephones
directly from their email, putting it in direct competition with Web calling service Skype and
more traditional operators such as AT&T Inc and Verizon Communications.
While Google had already offered computer-to-computer voice and video chat services, it
said that starting on Wednesday it will now allow calls to home phones and mobile phones
directly from Gmail for the first time.
Google promised free calls to U.S. and Canadian phones from Gmail for the rest of this year
and said it would charge low rates for calls made to other countries.
For example it said calls to Britain, France, Germany, China and Japan would be as low as 2
cents per minute.
Analysts said the service would likely be a bigger competitive threat to services like Skype's
than to traditional phone companies, which have already been cutting their call prices in
recent years in response to stiff competition.
This is a risk to Skype. It's a competitor with a pretty good brand name, said Hudson
Square analyst Todd Rethemeier.
Skype, which owned by private equity firms and eBay Inc and planning a $100 million initial
public offering, has long allowed consumers to make calls from computers to phones.
Skype became popular by first offering free computer-to-computer voice and video
Like Skype, Rethemeier said the Google service will likely be much more popular among
U.S. consumers making international calls, than among people calling friends inside the
Calling is so cheap already that I don't think it will attract a huge amount of domestic
calling. It could take some of the international market, he said.
Another analyst, Steve Clement from Pacific Crest, said that anybody who is tempted by
Internet calling services has likely already disconnected their home phone.
The type of person who would use a service like that isn't the type of customer who still
has a landline, Clement said.
Google said making a call through its service works like a normal phone in that a user could
click on the call phone option in their chat buddy list in Gmail and type in the number or
enter a contact's name.
Calls that cost money will be charged from an online account that users can top up with a
credit card, Google said. The service will not be available for making outgoing calls on cell
phones because other Google apps already cater to that market, the company added.
Google shares closed up $3.23, or 0.72 percent, at $454.62 on the Nasdaq, while the
shares of eBay rose 29 cents, or 1.27 percent, to $23.16, also on the Nasdaq.
(Reporting by Sinead Carew; Additional reporting by Bill Rigby; editing by Andre Grenon and
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