Hold the Phone: It’s Google Voice and It’s Free

Google last week released Google Voice, an application offering a number of features for the telecommunications space.

Among its offerings, the service allows users to place domestic calls for free from a PC, place low-cost calls internationally, switch phones during a call, record conversations, share voicemails, and transcribe voicemails to email or SMS with automatic recognition technology.

Google Voice is built on GrandCentral, a service that Google bought in the summer of 2007 and allows a user to tie all of her phones to one phone number. According to an email from Sara Jew-Lim, a member of the global communications team for Google, the automatic recognition engine was developed in-house and is the same engine used in Goog411, Google’s business directory service, and in its mobile voice search products.

The launch of Google Voice is just another sign, like the launch of the Google mobile operating system (OS), Android phone, or Goog411, that Google is serious about making a name for itself in the telecommunications space. The move also suggests that Google is looking to include new modalities, like voice, in its search capabilities.

With big household names behind the technology, the future may see increasing rates of adoption of voice-to-text applications by mobile users. Google’s entrance, especially in voicemail-to-text, could also potentially shift the sands for smaller, speech-focused players like U.S.-based Nuance Communications and U.K.-based SpinVox, which recently invested significantly in U.S.

“Google has a history of making disruptive changes to the marketplace,” says Jonathan Simnett, global director of communications for SpinVox.

And while neither SpinVox nor Nuance feels particularly threatened by Google, Simnett is quick to add that he sees Google Voice as a legitimization of voice-to-text services.

“What Google has done here is given people an opportunity to test the potential of voice to text,” he says. “It’s a very much lower quality system in terms of the accuracy of its conversion. That is going to allow people to experience a benchmark in voice-to-text conversion.”

Michael Thompson, senior vice president and general manager at Nuance Mobile, doesn’t worry about Google because, as he states categorically, Nuance is not, and has no intention of, pursuing a direct consumer strategy. It has no direct consumer offering for voicemail-to-text. Its offering, like most of Nuance Mobile’s, is for carriers.

“Google’s announcement to participate in their Google Voice service, which includes voicemail-to-text, is a Google decision to compete with [the carriers],” he says. “We will continue to power and supply the broader ecosystem.”

Thompson asserts that even with Google’s large mindshare, many of its mobile partners—companies like Verizon, AT&T, Samsung, T-Mobile, and Vodafone—use a range of Nuance Mobile products and have very powerful direct-to-consumer brands. Nuance, therefore, doesn’t feel the need to reach out for itself.

Bill Meisel, president of analyst firm TMA Associates, agrees with much of what both Nuance and SpinVox are saying. He agrees that Google is validating the concept of voicemail-to-text and, moreover, does not see Google Voice as an existential direct threat to mobile carriers in the short term. Rather, he sees Google Voice as an immediate threat to traditional landline phone providers—particularly given the free domestic calling it offers and the increasing losses of market share the industry has seen recently.

While not yet a matter of survival, Meisel sees Google’s announcement as an impetus for mobile carriers to get proactive about providing services like SpinVox’s and Nuance’s.

“Unless mobile phone companies are very naïve, they won’t want people considering their Google GrandCentral number their primary number,” he says.

That would be ceding too much ground, he suggests.

“We saw what happened in the [personal computing] field when in the case of the PC operating system, IBM was naïve and let Microsoft take over the operating system and that turned out to be what defined the PC. Maybe the number you call defines your phone service.”

At the same time, Meisel also cautions that there is a real threat in Google’s fully-automated, if flawed, system. SpinVox’s semi-automated offering, which has human transcriptionists assuring quality on the backend, is potentially more costly and less scalable--if also more accurate. On the other hand, Nuance, which offers both semi- and fully-automated systems, seems better positioned to adapt to this particular challenge.

Daniel Hong, lead analyst at Datamonitor, is also somewhat pessimistic about SpinVox’s prospects against Google.

“I don’t think there are any significant first mover advantages anymore,” he writes in an email to Speech Technology. “SpinVox has a lot of great channels but I still have not seen strong uptake in the service. This can be attributed to the cost or the strategy employed by the carrier. Overall, Google is in a good position to capitalize on new opportunities in the voicemail-to-text space without having to rely as heavily on channels and possibly introducing a free service that is monetized through ad support.”

Google itself would not comment on where it sees its place in the market. But, in a statement to the Thomson Reuters news agency, Craig Walker, group product manager for real time communications at Google, said “Right now we're just totally focused on getting the consumer product out.”