What's the Catch?
February 27, 2010 7:20 PM   Subscribe

What is Google's incentive to give people free long distance via Google Voice?

I'm interested in Google Voice. I'm particularly interested because, as I understand it, you make free long distance calls through Google Voice. Google essentially makes the call for you, and the cost is on them.

Why would Google do this? What's in it for them?
posted by cleverevans to Computers & Internet (13 answers total) 2 users marked this as a favorite
Presumably the same incentive they have for all their free products: targeted advertising.
posted by one_bean at 7:27 PM on February 27, 2010

All Google really gets out of Voice are voicemails to train their speech recognition system with, which they seem very dedicated to. My guess on their endgame (forgive the borderline conspiracy theory) is they're using this speech recognition system, also being seeded by voice search on phones, to easily "convert" YouTube videos into text, which is much easier to target ads at.
posted by ConstantineXVI at 7:32 PM on February 27, 2010 [10 favorites]

A lot of speculation here, but it has to be about the ads ... Or down the road we'll have to pay for all that is google!
posted by HuronBob at 8:07 PM on February 27, 2010

ConstantineXVI: "All Google really gets out of Voice are voicemails to train their speech recognition system with, which they seem very dedicated to. My guess on their endgame (forgive the borderline conspiracy theory) is they're using this speech recognition system, also being seeded by voice search on phones, to easily "convert" YouTube videos into text, which is much easier to target ads at."

Well, the speech recognition also goes hand in hand with their recently announced live translation feature... in theory you talk to a person in the same room while you have your "Google Translation App" running on your cell, which is up against your ear, and it translates what they're saying for you.
posted by IndigoRain at 8:50 PM on February 27, 2010 [1 favorite]

Google Voice started as Grand Central and was free long before the Googster got involved. As I understood it, there are certain call termination fees paid to the firm that ends a call in your location. THis theory requires some o0ne with more knowledge about it than me.

Also, I think part of the plan is to control all aspects of communication. They have the gamil/email thing down pretty good. If they can control the voice, text and video, they own communication. I think it all leads to search in some way and this is part of leading searchers to a google search and the ad dollars associated.
posted by JohnnyGunn at 9:49 PM on February 27, 2010

Keep in mind that the call isn't long distance from google's standpoint - they can route the internet part of the call to a local out-phone wherever you're calling and make a local call from there. This isn't free everywhere but it's nowhere near as expensive as making a long-distance call.

This doesn't really make sense - why can I transfer a phone-calls-worth of bytes to germany for no additional charge over what I already pay for internet, but I can't make a phone call to germany without paying kind of a lot of money? But, it's the way it is. VOIP is a way of "routing around" this kind of nonsense and at some point I imagine long distance rates will go way down, or bandwidth costs will go up.
posted by RustyBrooks at 9:51 PM on February 27, 2010

Google Voice also let's Google measure the popularity of business phone numbers, which could help them in the ranking of search results where there are associated business numbers.
posted by zippy at 10:43 PM on February 27, 2010 [1 favorite]

Here's a thought: "Long Distance" is a completely BS term in today's world.
It costs Google practically nothing (just as it presently costs your current carrier) to provide the service.

They may have decided that the brand recognition is worth more. Meanwhile, your phone company has decided that they'd rather make $25/month from each customer than get brand recognition.
posted by cmetom at 12:00 AM on February 28, 2010

Google's long term business plan is to become the de facto gatekeeper for the internet. What Microsoft is for operating systems, Google wants to become for internet users: the company everyone deals with because there isn't any alternative.
posted by Chocolate Pickle at 12:26 AM on February 28, 2010 [1 favorite]

I'm surprised that no one has mentioned Google's other major interest with all things telephonic: Their phones.

Google's overarching strategy appears to be to offer a suite of life-enhancing products at essentially no cost to achieve the following:
1) First and foremost, Google wants eyeballs for targeted advertising. Make no mistake, Google makes almost all of their considerable revenue from ads. The more users they attract to their services, however tangentially related, the more you'll stick around and use them in places they can easily plaster with ads.

2) Increasing Android's market share. Google has put a lot into developing a seriously worthy competitor to the iPhone. Google Voice is another in a line of products that they're able to offer full integration with Android phones, at a level not-quite-matched on the iPhone yet. They still offer their solution to iPhone users too, naturally, because the audience is considerable, and see point 1.

3) Simply creating opportunities for you to stick around and see ads is nice, and Google Voice only does that, as I mentioned before, tangentially. It's important also not to discount the seriously brand equity impact a product like Google Voice has. Google knows that you love them more because of amazing free products and services like Google Voice, Google Sky Map, Google Maps, GMail, Reader, Google News, Google Books, Google Docs, etc. Not all of those products are monetized, either with ads, or at all.

Some are just for fun, some are because Google considers themselves the preeminent information warehouse and the grand cataloger of all information. And all of it is built to leave you feeling better about the company and to increase customer satisfaction across the board. Those ads have to pay for everything else, so they entice you and encourage you to tolerate them by creating a truly wonderful user experience in so many other ways, at such little cost.

All that said, like the other posters mentioned, Google Voice costs almost nothing, when it comes to connecting long distance calls. Since the call is committed over voice-over-IP, the information is sent as cheap bandwidth. They only pay leasing fees for copper/POTS (plain old telephone system) cabling at the "last mile" or so, basically the last possible moment before switching on to the telephone system proper and getting into someone's phone jack. (Or likewise, switching to the cell site, and having the call completed there.)

The voicemail transcription component isn't "all they get" out of it. They've been offering GOOG-411 directory assistance which they use heavily for training their transcription/speech recognition services and even then, brand equity.

It's a multi-headed beast.

To me, the better question would be, why is Google paying to host millions of videos and stream them billions of times at CONSIDERABLE COST to them? There's no way that segment is anything approaching profitable: pound-for-pound, a YouTube visitor is dramatically more expensive to provide for than a user of ANY other Google service. Again, part of it comes down to their desire to be an arbitrator of all kinds of information. (YouTube's bandwidth costs alone are well over $1 million PER DAY! That doesn't include the considerable cloud-infrastructure required to process the over 80,000 videos they see incoming per day, or the storage to hold them.)

There's some altruism in it, strangely enough. And I think, deep down, part of it is that the company is still lead by two guys who have a long streak of "wouldn't-it-be-cool-if?" and the money to execute those ideas, subsidized by their better money making half. (Frankly, I also believe that they truly recognize the potential of becoming the number one, primary video delivery and distribution site. We'll see what happens with YouTube over the next couple of years...)

The shareholders keep seeing great returns, so they don't mind that YouTube costs tens of millions of dollars to keep in diapers each year. And we all benefit because of it.
posted by disillusioned at 2:39 AM on February 28, 2010 [3 favorites]

The actual bandwidth needed for a voice call is really shockingly small by today's standards. The same bandwidth needed to stream one video on youtube (let's say 500 kbit/s) could easily support fifty simultaneous phone call streams (e.g. Speex at 10 kbit/s). From a bandwidth standpoint this means that carrying voice calls is practically free to Google compared to what their networks already carry for their other services. The only real cost would be the termination into the public phone network, and as already mentioned since Google can carry the long haul portion of the call over the internet this means that the calls can be terminated locally at minimal cost.
posted by Rhomboid at 4:14 AM on February 28, 2010

Well, whats the benefit of google earth? It's a pretty awesome app and they just give it away for free.

One major benefit is increased customer loyalty. The more you use your Google apps, the more comfortable you are with using other ones for other things.

But like other people mentioned, the marginal cost isn't very high at all.
posted by delmoi at 5:47 AM on February 28, 2010

Delmoi, one of Google's plans is to turn Google Earth into a replacement for the yellow pages. They're starting to sell the equivalent of "targeted advertising" on Google Earth itself, for things like restaurants.
posted by Chocolate Pickle at 9:24 AM on February 28, 2010

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