Google voice etc.: The plot thickens

Ars Technica is reporting that Google Voice looks good, and that Google both has aquired about a million phone numbers, and that they are supporting number portability. No surprises there, but certainly interesting.

Google now has a bunch of tools to facilitate personal communications and interactions: Talk, Voice, Docs, Mail, Picasa, Orkut, etc. Googe Wave is not yet a product, but in many ways it is the most interesting of the lot. One can only wonder what comes next.

All of the products I mention above will probably consolidate somewhat through incremental improvements, but there are obvious synergies to be tapped here that requires more than slow consolidation. The main question is therefore not if Google will tap into these, but when and how. My guess is that there will be no "big bang" unification projects, but that the services will converge over some time. The end result however, will be like this:

• It will cover all the bases: For most users will be (almost) no need to escape from the Google universe whatever their communications and cooperation needs are.
• It will be tremendously open for third party innovation: This will enhance the point made above, but will do so by enabling differentiation to be performed by third party developers rather than Google itself. Very cost effective, very useful, and something Google already has ample experience with already.

If I was working for a Telco I would be afraid. Oops :-)

Perhaps Google Wave will form a good habitat for intelligent agents?

Google Wave is a significant innovation. See the stuff on the google pages for intro, prepare to be impressed, but I won't repeat it here.

It just struck me that perhaps Google wave will enable the growth of a bunch of interesting intelligent agents. These are of course not new, and the initial wave team has certainly gone out of their way to facilitate robots to participate in conversations. Intelligent agents in the web area had a boom in the late nineties but sort of faded from the public view after that. Patti Maes's research group at the MIT Media lab did a bunch of intersting stuff, I recommend reading through their publications.

One of the thing that are striking when reading these articles is number of hoops that needed to be jumped through in order to get anything working. Proxy servers, strange layouts, genetic programming and even then the performance was interesting but not altogether impressive, and certainly not ready for prime time in the form of mass market products.

This might change now. If wave is launched, as I hope it is, most of the "hygiene factors" necessary for a good user experience will be taken care of in a properly Googlish, Marissa Meyerish-pedantic manner. The wave team has aleady taken care of many but not all of the issues an intelligent agent needs in order to thrive, so this means that it might very well become common practice to include agents in conversations, and that means that agent-writers will finally have a big consumer market to offer their wares to. This will take place in two distinct ways:

Semi-covertly; Like for instance a spell checker that is quietly but consistently checking all input for spelling mistakes. Many other types of covert agents can be imagined: Looking up words and phrases and trying to find related texts in books, articles etc. If a covert agent does this work, it will be added as some kind of decoration to the actual content: In separate layout boxes, as links on the side of the main content (like google does sponsored links today) etc. The main difference being that you are in charge of which agents are doing the decorating, not Google.

Overtly: Agents that are more or less real subjects. They can present input somewhat like humans in various roles: Research assistant ("I found sixty nine references to this compound in the standard journals, but none of them refering to toxicity in larvae, however ..."(etc.)), and other roles as well I can imagine (boss, mother, social network surveilance agent etc. :-) This is of course a minefield for user interaction design, but that doesn't really matter: You see, this kind of behavior simply won't happen if it's not wanted. Agents are invited, not imposed on conversations. Furthermore agents are simple to add and since the substrate on which they act is already quite rich, work on the agents can be concentrated on adding interesting substance. When some interesting agents are produced, they can start breeding and mixing, perhaps metaphorically and perhaps almost literally through genetic programming. I believe this could be the start of some really interesting times. I just can't wait to get my hands on wave.

Please please please Google let me have access soon? ;)

Reading Google's tea leaves

Google isn't like other companies, at least not in every way (more below ;). One difference is that they usually do not announce their strategic intents very clearly, by normal standards. Interpreting their intent is a bit like reading tea leaves. You mix present world facts, history, guesses about the personalities of the involved people and hope to get an interpretation. The sources I look in daily are:

• Digg
• Slashdot
• The official Google blog
• In addition i look at what Google engineers publish and which issues are presented in Google Tech talks. Both of these give clues about interest intent and capabilities.

In addition I read other things, and talk to people. The thing to keep in mind is that Google is a very technical company, and in order to understand what they are doing one must understand a lot of technical details in order to make educated guesses about the intent behind the interest in those issues. I guess the average journalist or business analyst does not have these skills, hence Google's reputation for being very tight-lipped about their plans. I don't find them to be. I am very seldom (much) surprised by what they eventually announce. The thing is that Google does say a lot. Metaphorically they leave a lot of dots around in clear sight, but they leave it to us observers to connect these dots to form coherent pictures. Of course it helps if you can recognize what a dot is, and that you can read the technical literature to make educated guesses about what types of lines the particular dots tend to be endpoints for :-)

Right now I'm interested in Google the phone company, so I'm interpreting tea leaves every day to see what I can divine about the subject. The last few weeks a few things has popped up indicating that Google is preparing a massive onslaught on the telecommunications industry.

The facts:

Google already has the Google mail, Google Talk and Grand Central services established.

The Android mobile platform is really hot. I got my hands on a G1 developer handset last week, and apart from a few issues with battery lifetime that my contacts in the G1's manufacturer HTC assure me will not be present in production models, it is hot. There are a few warts and wrinkles but this is normal for all new phone models, and there is a sequence of upgrades planned (the first one called "cupcake") so I'm not really worried about this. Just about every major handset manufacturer except Nokia has announced that they are going to produce Android handsets. The apps in Google's appstore is, as expected, a mix of great and bogus. But there are a lot of great little apps there. I predict that Android will be a winner. In some ways the situation is similar to the PC market when Microsoft arrived with MS-DOS. Finally the coupling of handset hardware and software seems to loosen up, which in turn opens up for greater specialization in the industry, which in turn leads to better and less expensive products. To be sure, Nokia is the largest manufacturer (a billion handsets or so sold in 2008), but that doesn't matter in this picture: If most of the competent developers in this world create interesting and useful stuff for the Android, Nokia will be reduced to insignificance within five years (give or take a few years).

Then there is the case of Google's reductions and changed recruiting policy. They are closing down a bunch of engineering offices, firing temporary workers and axing projects. I won't discuss if this is a smart thing to do or not, but I will point out that the relatively anonymous Grand Central service does not seem to be affected by the reductions. It is a little like the dog that didn't bark in the Sherlock Holmes story. What doesn't happen can have greater significance than what does happen, and I think it has in this case.

Finally there is the rumor that Google is again considering to buy Skype. Skype has turned out to be a bad fit with eBay's other business, but I agree with eBay's assessment that it is a great standalone business. However, it is an even better business if combined with Google's offerings:

Grand Central is a great telephony product with superb configurability and call filtering, but it is currently only availalable in north america, still in beta, and has a limited user base. Skype is a great telephony product with world wide presence, it is so out of beta and mix traditional and IP telephony in a superb manner, but has very limited configurability and phone filtering opions. This is perfect complementarity if I ever saw it.

The chat and video conferencing options are more or less equivalent to what is available in Google Talk. There is some room for technical consolidation, and certainly no showstoppers when contemplating this. Complementarity, but not super-compelling.

Skype has recently announced a fairly decent mobile offering both for java based phones and Android. Google has a thoroughbred mobile effort. I'd say this is another perfect match. (Update: They didn't buy Skype, but bought Gizmo5 instead, cute move :-)

In conclusion

In sum, from a functional perspective, an aquisition of Skype could be of great benefit to both Google and Skype and would be a long step towards creating a world wide comprehensive phone service integrated with Google's infrastructure.

Google's growth in advertising revenue is declining, this means that Google is maturing as a company. Maturing companies as a rule see decerasing returns on their main product lines, but the market still impose an imperative of growth. One of the few sectors that is both a match with Google's core values and capabilities, and that has the kind of numbers that would make Google interested is the telecommunications industry. The Telecom industry is dominated by huge, mature companies that to a large extend depend on yesterday's technologies to deliver the day before yesterday's products (voice telephony on synchronous digital synchronous networks to be specific ;). I'd say this is also a good match for Google with its superb engineering capabilities, highly efficient internal infrastructure and an existing revenue base that will not be cannibalized by entering into telecommunications.

The way I read the tea leaves is that Google at present is pointing its guns at the telecom industry. They are doing so in broad daylight so everyone who looks can see, they are just not announcing it in clear text. The dots are visible, but we have to draw the pointing gun ourselves.

Google, the phone company

It's about time we start taking Google seriously as a phone company. I'll walk quickly through three facets of their current offerings, and then think aloud about what this means

Today (january 2009) Google has three major phone-related products that I know of:

1. Android. A software architecture for mobile phones. Google doesn't actually sell any Google phones, but the Android architecture makes it -really- simple to write decent software for mobile phones. Nobody has actually done that before them.
2. Grand Central. When signing up for Grand Central (currently in private beta) you get a phone number. When someone calls that phone number you decide what to do with the incoming call. You can route it to another phone, pick it up on the web, route it to a voice mailbox, listen in on the voice mailbox and pick up the call (like you can do on an ordinary old fashioned answering machine). All of this is administrated through the web. So far there seems to be little integration between Grand Central and the rest of the Google suite (talk, docs, mail etc.) but it's a fair guess that this will happen at some stage. One particularly interesting possibility that configurations and data for the service is made accessible throug Googles data API, similarly to the way blogger, docs, and other services has been made available. As I understand it, Grand Central as it operates today, route phone calls to the location within GC´s network where it is the least expensive to terminate the call. If the call turns out to be a local call, so much the better. This is a north american phone centric solution to solving the termination cost problem that will otherwise bedevil anyone trying to enter the telephony market. More about this later.
3. Google Talk. Google talk has had voice telephony a long time, and video was introduced in 2008. Google Talk has never had any kind of direct connectivity between licensed telephony with phone numbers. The only people you can talk to are other Google Talk users.

Now, let´s see what could happen if we start playing with these components.

Fully web configurable telephony

Actually this is reality already. Any phone with an internet connection and a decent browser (like the ones Android or the iPhone has) can access the configuration menus of Grand Central, and Grand Central can of course route phone calls to the phone, so there you have it: A mobile phone with all the best telephony features from the last twenty years, with a decent user intrface (no more %&/()#!!! DTMF commands to remember).

Receiving phone calls into GTalk

This is of course a no-brainer, and in all likelyhood something that is already in the works in some lab somewhere. Technically it is just a matter of adding an adapter for GTalk´s jingle interface, hook it to the internals of Grand Central, and when it rings in GC, it rings in GT. Simple as that. Of course it is not quite as simple as that, because just doing this will make a new product:

A "SkypeIn" clone ("GTalkIn"?)

Google talk with incoming phones to real phone numbers is effectivel equivalent with SkypeIn. Of course, the filtering and routing in Grand Central far surpasses what is available in Skype, but that is only to be expected ;) Another interesting feature with this option is that it effectively removes termination costs for handling incoming calls. Since Gtalk use the internet, phone traffic is priced as best effort internet traffic. In many cases this is much less expensive than having to pay termination costs to another operator, in addition to the transfer cost of reaching that operator in the first place.

But wait, there is more:

Android GTalk Client

If a GTalk client in introduced to Android, an Android user will have several options for receiving incoming calls:

• Receive them directly to the phone number associated with the phone (as an ordinary mobile phone does today).
• Receive them to an ordinary listed phone number (as Grand Central allows today) and route that conversation to the mobile phone either as an ordinary phone conversation, or as a GTalk conversation.
• Choosing which type of conversation to use can be done manually through Grand Centra´s menus, as today or ...
• ... automatically selecting GTalk if a sufficiently fast wifi network is available, or a 3G data plan with sufficient bandwidth and low enough price is available or ..
• ... selecting ordinary mobile phone termination if gtalk termination is available or ..
• ... selecting a fixed line phone if there is some rule that says "if I can see my home wifi network, that means that I am home, but that means that I want my phone calls to be routed to the fixed line phone"
• If the connection quality for GTalk falls below some treshold, the conversation can be passed back to the phone network, and when internet connectivity is reestablished, the conversation is passed back.

etc. The pattern emerging here is that the real-time voice traffic will go through whatever channel is the most opportune at the moment, but the signaling and configuration traffic ("signaling" in telco parlance) will almost exclusively be sent over the Internet.

Competition on features
If the competition of voice operators (fixed and mobile) no longer centers on cost, then the amount of features available will become important. Google is well positioned to offer a wide spectrum of services for their phone products (voicemail, text recognition, mailbox integration etc.), and this in itself might be an important factor to attract customers from their cometitors.

Termination cleverness

Apart from running a physical network, a major cost component of being a telecom operator is the combination of transit termination costs. Transit costs is the cost of line capacity between operators. Termination costs are the costs you pay to terminate a call in someone else's network. So if I call you, my phone company has to pay for the use of the physical line connecting your and my telco, in addition my telco has to pay your telco termination costs. If the call happens within the same company, no termination costs needs to be payed. The combination of termination and transit costs are really important for the cost structure of a telco, so all kinds of games are played with technologies and regulatory bodies in order to minimize these cost.

In the US mobile to mobile (m2m) termination is usually based on bill and keep, meaning that mobile operators don´t bill each other for calls going between them, fixed to mobile (f2m) and mobile to fixed (m2f) is symmetrically priced, and usually equal to the termination cost of the fixed operator incumbents (which is very cheap, in the order of one US cent). So in the US termination is not really a big cost, but long distance transit is. In Europe local termination represent the dominant cost but transit is usually quite inexpensive. European termination costs are (mostly) regulated by EU, and they try to regulate in the direction of symmetric pricing for fixed line, mostly symmetric pricing between mobile operators within a country, and wildly varying asymmetric pricing both between mobile and fixed operators and between mobile operators in different countries.

This also means that Google has a few cards of its own to play: The vast amount of network fiber they has bought and rented around the world can be used in any way they like. If they choose they can route phone conversations through them. In the US they can use local (and inexpensive) termination to forward calls to ordinary phones, and their own backbone fiber to handle transit. In Europe they can still use the internet for transit, but because of higher termination costs there doesn´t seem to be a single move that can put them in a winning position with regards with local termination. There are several moves that can help them tough:

• They can become a local voip operator in several countries. Voip operators are regulated as fixed line operators, meaning that they enjoy low cost symmetric pricing to other fixed line operators within a country. Calls routed through GC can then seem to appear from a VOIP operator, and calls going into local VOIP phone numbers can be routed to wherever GC wish them to be routed. If the amount of incoming calls plus whatever advertising revenue Google can get from these calls exeeds the costs of outgoing VOIP calls, this will generate positive revenue.
• They might get away with becoming an Mobile Virtual Network Operator, and play the mostly symmetrical pricing game between the mobile operators. I don´t how they can get away with being both a voip operator and an mvno, and be allowed to route traffic between these through the internet, but if they can, there it might be possible to save som cost there too. Perhaps.
  

If you use Grand Central and the number you are being called on (your GC number) is "located" (terminated) somewhere else than where you are located several things happen. First the call is terminated at Google, and google is payed a termination fee for terminating the call, but then they have to forward the call to you and if they only used the phone network, that would probably mean that they would have to pay a termination fee to reach you where you are. But this is Google, they don't have to use the phone netowork. They route the call to a phone through the internet to a phone interface physically close to you and then call you from that number with very low termination costs. If you are in Ireland you will be called from a number in Ireland, if in New York, you will be called from a number in New York. The conversations themselves are moved around the world by Google, who does it as cheap as or cheaper than anyone else, meaning that it will be very hard indeed to undercut the prices we an expect Google to offer, once they start offering international phone calls.

Your GoogleID, not your phone# is your primary identity

When you open up the box with an Android phone, the first thing you do after sticking in your SIM card, is to enter your gmail account. Immediately our GTalk contact list appears in the phone and you are off. Now, normally GTalk contact lists don´t contain phone numbers, but this is sure to change quickly, and once entered, why bother with phone numbers any more? What you want to reach is your contact, not the phone number, right? This of course opens up the possibility of avoid using the phone operators at all to reach your contacts. If you both are on GTalk, then use gtalk, if not use the phone networks. You'll always reach your contact, you'll reach them in the least expensive way and if you can't reach them by phone you can either send a mail or a voicemail.

Interfacing with VOIP through SIP
An interesting issue was pointed out to me by Ruben O. at open-voip.com; interfacing with other voip operators offers a bunch of opportunities for Google.

• Today VOIP operators typically use traditional telcos for interconnect, even if this is technically not necessary. According to Ruben the reason is that there is a very poorly developed VOIP exchange infrastructure. Google is large enough to change this if they wish. They could become a hub for SIP based voip infrastructure and possibly even start to collect termination fees from other voip operators.
• Even if Google has no wish to become a generic hub, a SIP interface has other advantages. One of them being that it is quite simple to interface to both Microsoft and Cisco's unified communiations solutions as well as IMS telephony (if and when that ever becomes a reality :-). This would mean Google empower organization to have interconnect with Google's users (who are suceptible to Googles ads) at costs that may be lower than if they connect through other types of telephony systems with more traditional pricing structure.
  

All kinds of voice mashups

Once a data API is available, all kinds of mashups are possible, and some of them will be crated. This is the same type of game BT is playing with Ribbit and its API offerings, a well as what Vodafone is trying to do on Betavine. Whatever good ideas are discovered elsewhere, you can becertain that Google telephony will be able to do similar things. In fact, when I first heard about Grand Central, my first thought was "wow, this is almost just like Ribbit, without Adobe software and without scripting ability". Google has a good chance of being a first choice among those innovators that already has an audience using Google's services. Integration into CRM and sales support system are sure to come (similar to the Salesforce integration of Ribbit), and possibly even social networking sites.

Advertising

I don't know how, but I am sure there will be some way to earn advertising money on voice, and that whatever the solution for this is, Google will implement it.

I am sure there is more, and I'll try to update this post when I find it, but this is all i have for now ;)