Wednesday, August 24, 2005

Google planning IM service, report says | CNET

Google planning IM service, report says | CNET "Google is set to introduce its own instant-messaging system, the Los Angeles Times reported Tuesday. Such a move would mark an expansion by the Web search leader into text and also voice communications"

I have said this many times before. When Yahoo and Google offer a Skype like service, you can consider that the nail in the coffin for voice revenue globally. With these two large names coming into the VoIP game, VoIP is about to go main stream.
Of course at the moment I dont know exactly what Google will offer in voice comms but I would think it would be a similar model to Skype where they will not require their own network infrastructure to offer the service.
Get ready for a major hit to the incumbent share prices globally if Google are able to add security to the product, and convince big business that their calls are just as safe as going over the PSTN network.

So who else is effected?
All the network equipment vendors that tout VoIP products. This is the likes of Nortel, Cisco, and Avaya among various others. How much of an impact is this going to be to them? To a company like Avaya, it will be huge, to Cisco it will also be for a company like Cisco, a fairly large hit, for Nortel not so large although they will struggle to find alternatives to compensate in lost revenues as this is one of their growth targets.

But, yes there is a but. As VoIP becomes more commonly used, network traffic goes up, which means you need more network equipment that can carry the traffic. So thats a winner for the likes of Nortel and Cisco.

So my recomendations

Google - buy
Yahoo - buy
Cisco - hold
Nortel - Sell
Avaya - Sell

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