Google Buys Gizmo5 Internet Calling Service

The Google is bulking up its phone offerings with the acquisition of Gizmo5, a company that offers voice-over-IP software for mobile phones and computers.

The companies did not reveal terms of the deal, which was announced Thursday following rumors earlier this week that the acquisition might happen.

In a blog posting about the deal, Google said that while current Gizmo5 users can continue to use the service, no new customers can sign up for now.

Very little information remains on the Gizmo5 Web page. The service is similar to Skype's in that it allows users to make low-cost or free calls using a software client on their computers. Gizmo5 also offers a client for mobile-phone users.

The acquisition follows Google's purchase of Grand Central more than two years ago. Fans of that service began to worry it might die at Google since it took about two years for Google to begin accepting new customers for the service, now called Google Voice.

Google Voice offers users a variety of services including transcribed voicemails and low-cost calling. Users can also get a new phone number and use that same number on multiple phones.

The service has been the subject of some controversy. It is the subject of a U.S. Federal Communications Commission inquiry, launched as a result of complaints that Google blocks some calls.
Gizmo5 and Google Voice are already integrated; Google Voice customers can include a Gizmo5 account as one of their phones.

It is the fourth acquisition Google has announced this year. Earlier this week it said it would buy AdMob for $750 million.


Source: PC World


Wall Street Beat: Big Tech Deals Stir Market


As industry insiders attempt to gauge the impact of economic recovery on IT, acquisitions and legal deals among vendors including Intel, Advanced Micro Devices, Hewlett-Packard, 3Com and Logitech are sparking investor interest by altering the shape of the tech market.

At first blush, AMD is one of the big winners. The company and its archrival, Intel, announced on Thursday that they have settled all antitrust litigation and patent cross-license disputes between the companies. Intel will pay AMD US$1.25 billion. AMD's share price jumped 22 percent to close the day at $6.48, up by $1.16.

The deal gives AMD a much-needed cash infusion. But ultimately the real winner may be Intel, even though it will take a big earnings hit for the quarter. As a result of the legal settlement, Intel said it expects its spending in the fourth quarter to be approximately $4.2 billion, up from $2.9 billion.

However, the chip giant needs the competition from AMD to stay fresh and focused, and to allay antitrust concerns. The deal also allows Intel "to focus on its real long-term threat," according to industry analyst Jack Gold. "No, it's not AMD – its ARM Holdings and all of the licensees of the ARM chip designs (e.g., Qualcomm, TI, Freescale, Nvidia, Samsung, Marvel). While PC and server chips are its breadwinner today, Intel rightly understands that the sheer number of personal and consumer intelligent computing devices that will be built over the next several years will far outnumber the traditional PC marketplace," Gold said in e-mail.

Intel shares dropped $0.16 to close at $19.68. That doesn't mean that IT investors thought the AMD deal was bad for Intel; most tech bellwether shares dropped Thursday on macroeconomic concerns. The Treasury Department reported that the federal deficit for October totaled $176.4 billion, higher than economists expected. The federal deficit for the budget year, ended Sept. 30, set an all-time record in dollar terms of $1.42 trillion. High deficits may push up interest rates, which could in turn hurt what looks to be a slow, fragile recovery.

The signature M&A deal of the week was HP's $2.7 billion acquisition of network switch maker 3Com. The purchase is a challenge to networking giant Cisco Systems and a major step toward HP's ability to provide a one-stop shop for computing, storage, services and networking. Cisco earlier this year started selling servers, which made it more of a direct competitor to HP.

However, the deal may have its biggest impact not on Cisco, but on smaller networking players like Brocade Communications. Brocade shares Thursday slumped to close at $8.08, down by $1.17 or 12.7 percent. Cisco shares declined by only 2.17 percent, dropping $0.52 to close at $23.40. The HP acquisition takes Brocade out of play as a possible acquisition target by HP while increasing competitive pressure.

Video communications systems, a major thrust for Cisco as well, has become a hot product category as businesses cut travel to pare costs. Logitech shares slumped in the wake of the news, however. Often, acquisition announcements have a negative impact on the acquiring company's stock. A big purchase can dilute earnings for the acquiring company. However, Standard & Poor's Equity Research reiterated its "hold" recommendation on Logitech, stating that the deal will help the vendor in a fast-paced market.

Tech market reports this week, meanwhile, were generally positive. IDC Monday said that microprocessor unit shipments in the third quarter rose 23 percent from the second quarter, and by 0.3 percent from the same period in 2008, though the overall value of shipments declined.

In the mobile-phone arena, smartphone sales increased 13 percent in the third quarter over the year-earlier period, Gartner said Monday. Overall mobile-phone market growth was much lower, increasing by 0.1 percent, Gartner said.

While economic recovery appears to be underway, economists urge caution.

"We believe that the recession is ended, that it ended in July ... but that certainly doesn't mean that we're out of the woods," said Shawn DuBravac, an economist at the Consumer Electronics Association. "We believe that while we're in an expansionary period now that it will be a mediocre, slow recovery where jobs continue to be hard to come by. With that all industries will suffer; certainly consumer electronics will have its ups and downs."

The big hope for tech is that, just as it has been less affected by the recession than other sectors, it will fare better in the recovery as well.

"The good news is certainly consumers continue to gravitate toward technology," DuBravac said. "They continue to spend on technology while trying to cut back on other categories to make room for their tech spend."


Source: PC World



Global News Recap, World Tech Update

Topping this week's World Tech Update is the news that Advanced Micro Devices and Intel have settled all antitrust litigation and patent disputes. Intel will pay its rival US$1.25 billion and has agreed to a set of business practice provisions. In return AMD has agreed to drop all regulatory complaints worldwide and all pending legal disputes.

The Consumer Electronics Association (CEA) held its annual CES preview in New York. CEA economomist Shawn DuBravac said, "We believe the recession has ended and that it ended in July ... but that certainly doesn't mean that we're out of the woods." He said that the consumer electronics industry will have its "ups and downs" but that consumers will gravitate toward technology with their purchases.

Some Australian iPhone users with jailbroken phones got a surprise when they discovered their wallpaper was changed to a photograph of '80s singer Rick Astley. The Ikee worm infected some users by exploiting a Unix utility called SSH running on some phones.

A new phone from Fujitsu can split in two so that the top half contains a 3.4-inch touch-screen display and all the electronics needed for the handset, including the radio module and antenna. The bottom half has a QWERTY keyboard and a slide-out numeric keypad.

In our news in brief this week we take a quick look at HP's planned acquisition of networking vendor 3Com, the European Commission's formal statement of objections over Oracle's planned acquisition of Sun Microsystems and a recall notice from Nokia concerning faulty mobile-phone chargers.

Intel started selling a new e-reader on Tuesday that can snap pictures of books and newspapers and then read them back to people who have a hard time reading the printed page.

Our last story is about the AIDA robot under development at MIT that will act as a companion to help drivers save gas and find more efficient routes.

Source: PC World