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Is Google Finally About to Get Serious About Messaging?

By Evan Niu, CFA - Apr 8, 2013 at 7:00PM

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Apple, Google, and Facebook are all trying to dominate messaging with numerous services. Why hasn't the search giant ever taken a serious attempt at a unified service?

For a company that's been trying to focus more lately, Google's (GOOGL 4.16%) current amalgam of various messaging services is in dire need of some unification. The search giant has a plethora of different offerings geared toward mobile and desktop messaging, and none of them have made major impacts on the market.

Google Talk is a desktop platform for chatting and video calls. Google Voice offers free SMS texting, but requires using a separate number. Google Plus Hangouts are meant for group video chats, and Google Plus Messenger is geared toward messaging on the go. That's a lot of services that are needlessly distinct, since a unified service would have greater brand strength.

This is nothing new; Google product manager Nikhyl Singhal conceded last summer that the company has "done an incredibly poor job servicing [its] users here," noting that Big G was planning to merge the services. The name of the unified service has been rumored to be Google Babel, which is expected to be a cross-platform chat service available on Android, Apple (AAPL 1.89%) iOS, Chrome, Google Plus, and Gmail.

Last week, a Digital Trends report suggested that Google was in talks to acquire popular cross-platform messaging app WhatsApp for upwards of $1 billion. The search giant and the mobile start-up have been at the negotiating table for a little over a month, with the latter still trying to fetch more.

Source: WhatsApp.

WhatsApp has promptly taken off as an SMS alternative, since the service uses existing phone numbers, supports numerous different operating system platforms, and uses existing data plans in lieu of SMS plans. For $0.99 and no ads or in-app purchases, that's quite a value proposition that wireless carriers are none too happy about, and why the app is the No. 2 paid app in Apple's App Store currently.

Apple's iMessage has also taken off in popularity, in part because of its tight integration with iDevices so there are no extra steps required by users. On the last conference call, CEO Tim Cook mentioned that the company now sends 2 billion iMessages per day. iMessage also ties into Apple's desktop platform, offering another layer of convenience. On the video chatting front, Apple also has FaceTime.

Facebook (META 5.10%) has also been beefing up its mobile messaging capabilities. Not only does it offer texts and media, but the social network even just added free voice calling to its iOS Messenger app, using the phone's data connection. Facebook just wants to be the sole communications medium between you and your friends, even if it doesn't monetize messaging directly.

Apple, Google, and Facebook are all vying for messaging domination, much to the chagrin of wireless carriers. It's about time for Google to finally get serious.

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