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Google Confirms Purchase Of VOIP Provider Gizmo5

Google (NSDQ: GOOG) has confirmed its purchase of VOIP startup Gizmo5. The deal had been rumored earlier this week. In a short post on the Google Voice blog, Google said no new features would immediately come to its products, but it did say that Gizmo5’s engineers would join the Google Voice team to “continue improving the Google Voice and Gizmo5 experience.”

Terms of the deal were not disclosed, although TechCrunch—which first reported that Google had purchased the startup—put the purchase price at $30 million. Gizmo5 had raised $6 million in a round of funding three years ago.

In September, Google CEO Eric Schmidt said the company was once again on the acquisition trail. He obviously was not kidding. After a streak of eleven months without a single purchase, Google has now bought up four companies in the last four months: video compression firm On2, “captcha” startup reCaptcha, mobile ad network adMob, and Gizmo5.

So, why might Google want Gizmo5? TechCrunch’s Michael Arrington suggested earlier this week that Google made the buy because Gizmo5’s VoIP service allows voice call connections between computers and real phones, something Google Talk doesn’t. The acquisition and Gizmo5 integration could also serve as a tidy way to transform Google Voice and Google Talk into a unified VoIP communications service—and true Skype rival.

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Nov 12, 2009 6:13 PM ET

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Posted In: Money, M&A & Venture Capital, Mergers & Acquisitions, Companies, Google

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