Oslo, Norway — In an obvious attempt to ameliorate the services it can offer online, Internet search engine giant Google on Tuesday said it has signed an agreement to purchase Global IP Solutions (GIPS), a Norwegian company specializing one of the key fundamental technologies to route IP calls over the Internet and video-conferencing, a move that would give it superiority in the voice over Internet protocol (VOIP) technology used by its rivals Yahoo and AOL, the two companies said in a joint statement.
The two companies jointly disclosed the move Tuesday morning, saying that Google has agreed to pay $68.2 million, (421 million kroner or 54.5 million euros) for Norway’s Global IP Solutions (GIPS), a premium of 27.5 percent over the most recent trading price and of 142 percent from January 11, when GIPS announced interest from a strategic partner.
The friendly all-cash transaction values GIPS shares at 13 Norwegian crowns each, and the offer has already been acknowledged by about 50 percent of GIPS’ shareholders and is recommended by its board, and is expected to close before the end of August. GIPS said that it did not expect that the deal would be subject to the approval of antitrust agencies.
“The Web is evolving quickly as a development platform, and real-time video and audio communication over the Internet are becoming an important new tools for users,” said Rian Liebenberg, an engineering director at Google, in a statement. “GIPS’ technology provides high quality, real-time audio and video over an IP [Internet Protocol] network, and we are looking forward to working with the GIPS team at Google to continue innovating for the Web platform.”
“There is a good industrial justification for the deal based on Google’s increased efforts in communication on its web solutions,” GIPS board chief and CEO of Kistefos Venture Capital, Ditlev de Vibe, said in a statement. “The price offered by Google is very good and the board can safely recommend it.”
Oslo based GIPS is headquartered in San Francisco but held by Norwegian investors and listed in Oslo, develops voice and video solutions for IP networks.
On its website, GIPS claims that its software is “deployed in over 800 million end-points and empowers service providers, developers and hardware manufacturers to resolves the full range of network impairments such as delay, jitter, packet loss and echo in real-time audio and video applications.”
The acquisition would give Google entry into one of the major VOIP applications available; the GIPS technology is used to route Yahoo Instant Messenger’s voice calls, in addition to Cisco’s WebEx system, and supplies voice and video application for IBM’s Lotus Sametime. GIPS asserts that its technology is already installed at over 800 million endpoints.
“Google has been a valued customer of GIPS for many years and has greatly influenced to the development and innovation of our products to date, Emerick Woods, the chief executive of GIPS, wrote in an email to shareholders that the company posted on its Web site. “We have always appreciated their position in the industry and share the common vision of accelerating next generation innovation in the web-based solutions for real time communications.”
Google has assured GIPS that its business will remain unchanged, Woods added.
However, Google did not disclose any specifics about how it plans to develop or deploy GIPS technology, but the company could use it to enhance Google Voice, Google Talk, or audio and video capabilities in its Android operating system or Chrome OS.
With Google recently embarked on to launch an Android-based “Smart TV” platform in conjunction with Intel and Sony, GIPS technology could find its way into consumer electronic devices as well.
Google has been aggressively developing its real-time search capabilities and most likely the company foresee value in providing real-time audio and video wherever it can.
Other recent Google acquisitions in this category include the company’s purchases of Episodic, an online video platform, in April, of Gizmo5, a maker of VoIP software, in November last year, and of On2, a video compression technology company, last August.
The announcement comes just a day before Google is readying itself for Google I/O conference, an event dedicated to the idea of making the Web the foundation for much more than just static Web pages this week in San Francisco.