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Here are highlights from Tuesday's Analyst Blog:
Google Voice Integrated by Sprint
In a recent blog post, Google Inc (Nasdaq: GOOG) announced an agreement between Sprint (NYSE: S) and Google Voice. The agreement calls for a seamless integration of Sprint and Google Voice services. The date on which the agreement comes into effect is uncertain, although it may be expected within the next 2-3 months.
Once operational, the integration would enable an existing Sprint mobile number to be used as a Google Voice number and vice versa, depending on what the customer chooses. In either case, the user would be able to avail of Google Voice services (something that was possible earlier only through the Google Voice app).
Google Voice acts as a telecom switchboard, helping to manage the user's calls by enabling incoming calls to ring on multiple registered devices (whether phones or computers) owned or controlled by the user and allowing users to make or receive calls through Gmail.
According to the terms of the agreement, voicemail functions (including transcriptions) for Sprint will now be handled by Google Voice. Additionally, international calls will be completed by Google Voice, a big positive for users considering Google's nominal charges.
This is a major step for Sprint, since Google's free/low-charge calling and messaging services have the potential to eat into their revenues. This was the main reason that AT&T (NYSE: T) and Apple Inc (Nasdaq: AAPL) banned the app from Apple's app store back in 2009. However, by 2010, Google was able to work their way around the problem, making Google Voice accessible by any HTML 5 browser.
One can't help but wonder where collaboration would come to an end, since it is hard to understand what could be in it for the carrier (call forwarding charges of 20 cents per minute are also being discontinued by Sprint). Carriers could eventually become more open to Google Voice services, if they are compensated in some way for the use of their network infrastructure; at least that is the way the market appears to be going.
If Google Voice gains traction, services like the one provided by Skype -- which is 30% owned by eBay Inc. (Nasdaq: EBAY) -- will also take a hit. For now, Skype is winning big in the enterprise space, where it has connected with a number of enterprise networks.
However, given the Google brand name and the increasing use of its apps even in the enterprise space, stronger adoption of Google Voice in the enterprise market should not be ruled out. The agreement with Sprint (and any others that might follow) could help this transformation.
We have a short-term Neutral rating on Google shares, as indicated by the Zacks #3 Rank.
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