Google (NASDAQ:GOOG) (NASDAQ:GOOGL) isn't afraid to dive headfirst into innovative technologies, even if it means banging heads with some major players. Google Fiber, its lightning-fast Internet connection service, shook up the cable and telecom industries. Overnight it seemed, traditional Internet providers suddenly remembered that they, too, could offer faster connection speeds.
This time, Google has its sights set on telecoms with a new service that could potentially alter the world of long-established phone providers. Telecoms don't have the negative reputation that cable providers do, which is part of the reason Google Fiber is such a hot commodity: Who doesn't want to fire their cable company? As for telecoms, Google's sheer size and global reach is enough to at least get some telephony execs to stand up and take notice.
Who wants to Hangout?
Google Hangouts is a messaging, photo-sharing, and video chat platform launched in the spring of last year. Like most things Google, Hangouts is readily available on your PC and Android or iOS mobile devices. Initially, it required a Google Plus account to join Hangouts, but after a lot of user grumbling, that prerequisite ended a couple months ago.
As you may know, Google+ is the search giant's answer to Facebook (NASDAQ:FB), but has never really caught on, which explains why the company was trying to force-feed the platform with its Hangouts download. Now, Hangouts is a stand-alone app, and it has gotten a lot better.
The new, mostly free, service
When Google rolled out a Hangouts update in April, the rumor mill started. Some tech geeks tore the update apart and found some very intriguing things in Google's Voice feature. In addition to an SMS for texting, the techies found code related to phone call and voice mail functionality. Let the scuttlebutt begin.
Turns out, the rumors were right. On Wednesday, Google announced the newest Hangouts app that includes free phone calls to anyone in the U.S. and Canada, and ridiculously low per-minute rates for making international calls (not including Canada). It's not even a requirement the person receiving a call is a member of Hangouts, though you can bet Google would love it.
The new version of Hangouts, v2.3, will be "rolling out over the next few days," according to Google, and will need to be downloaded for Android users, along with installing a dialer that's included with the new app. For iOS and web users, Google said the voice call functionality will be available the next time a user opens the Hangouts app.
As for non-Canadian, international calls, Google's rates are a pittance compared to what it calls the, "leading Internet telephony provider" in each respective country. For example, use Google to make a call to Mexico for a mere $0.05 a minute, compared the existing telephony rate of $0.28 per minute. Have friends or family in India? Google Hangouts calls will cost you a mere $0.01 a minute, a third of the existing alternative.
How big can this get?
Google's hardly alone in the world of Internet voice calling, or VoiP. Facebook, Google's primary digital advertising competitor, introduced its own video calling solution using a customized Skype-like feature. Even though Facebook users can only video call other Facebook friends, Google's foray could be the impetus for it to open the door for offering voice calls, à la Google's new Hangout feature. And there are a host of other, niche players that allow for voice calls via the Internet.
There's potential for Google's new call feature to be disruptive in large part of its scale. Google consistently sits atop the list of the world's most popular websites, and that gives it a unique advantage over other Internet call alternatives. Not to mention, free is a very good price, and even Hangouts voice calling international rates are extremely affordable. Google can get away with such ridiculously low charges precisely because of its size and global reach.
Final Foolish thoughts
Hangouts' newest feature may not have giant telecoms shaking, but like cable, Google's provided an alternative for consumers to consider, and that changes things. Will it add significant revenues directly to Google's ever-growing topline? Not likely, but that's not really the point. What it does is position Google as, well Google: always willing to take on the conventional way of doing business.
Just as with Facebook, let's not forget what Google loves most, and does best; gather and utilize information, and now Google's opened the door to yet another potential source of information. Hangouts will make calls users either couldn't make before because of area coverage restrictions, or wouldn't because of costs. Now if Google would just issue phone numbers, we can give our telecom provider the boot, just as we did with our cable company.
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (A shares), and Google (C shares). The Motley Fool owns shares of Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.