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GoogleVoice: Great For Users, But What About Investors?

Elizabeth Walker Partner, Marketing Masters, Marketing Masters Recent Posts

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August 19, 2009

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Since Google acquired GrandCentral and offered GoogleVoice in beta in the US earlier this year, reviews have been mostly ecstatic. PC Magazine and Computerworld use words like "perfect" and "dynamite". Individual users report "I love having this much control over every aspect of my phone service"

For those of you not caught up in this latest offering, Google Voice seems to fix pretty much everything that make small business owners nuts about current telephone solutions. You have one number for voice and instant messaging. Call anyone in the US for free. Route calls to any of your phones. Customize voice mail by caller. Conference. Record.

Signing up for the service once it's out of beta seems pretty straightforward. So we're wondering, "How will this effect current voice carriers, most importantly. wireless carriers?"

One way to think about Google Voice is to compare it to other services that stand "in front" of an established business and re-jig the cost/value equation. There are a couple of ways this can happen. One is to offer the same or better service at a lower cost.

For example, Expedia, likeTravelocity, replaces direct calls to airlines, hotels, tour operators and resorts by promising "The best price of every trip, guaranteed." These sites have been a boon for their partners. For example, Expedia's annual summer sale has grown to become one of the most significant hotel promotional events in online travel. In 2008, room nights for hotels that participated in the summer sale grew 42 percent faster than hotels that did not take part.

In the case of Google Voice, the goal is obviously to take share away from current providers.Since long distance, data services and long-distance roaming generate the most profit for wireless telecos, the implications are tremendous, and so scary that Apple has banned the software from iPhones. (The White House is now "interested" in the conversations among Apple and US telcos - stay tuned."

Long term, while we may all benefit from lower teleco charges, we will also see telco margins squeezed as relentlessly as newspapers', broadcasters' and music companies. If you are an investor, it's time to be cautious even while you are enjoying your new freedom as a user.

Elizabeth Walker is a partner in Marketing Masters and a Duct Tape Marketing Coach located in Cobourg Ontario. Find more information online at www.kickstartscorecard.com.