As if Google isn’t doing enough to rile up the Federal Trade Commission, today it announced that it is offering $68 million in cash to buy Global IP Solutions (GIPS), a company that makes Voice Over IP (VOIP) software. Google’s press release says it’s offering to buy all the shares of Oslo, Norway-based GIPS for $2.12 a share.
GIPS is listed on the Oslo Stock Exchange and the offer represents a 27% premium over the closing price of May 14, but after being acquired it will be delisted and become part of Google. A Wall Street Journal article noted that GIPS financial performance is quite small — it only has $12M in revenue and was losing money — but that its tools will be useful to plug VOIP technology into various Google communications applications.
So, why might the FTC be interested in this? Well, Google already bought Grand Central, which has become part of its own suite of VOIP service, including Google Voice (A VOIP service). Clearly Google is building quite a powerful Internet telecommunications platform. Global IP is the software used by companies such as Yahoo, IBM, Aol, Webex (owned by Cisco), and Baidu. So now not only is Google providing many Internet-based telecommunications services, but its buying a company that supplies VOIP tools to many competitors.
GIPS CEO Emerick Woods addressed the competitive issue, saying in a statement that he had been reassured by Google that current customers would not be affected.
“This is an exciting milestone for GIPS as we join Google with a shared vision to transform and accelerate IP communications,” said Emerick Woods, Global IP Solutions CEO. “With Google’s global reach, scale and widely recognized leadership, we are confident that our existing customers will continue to be fully supported while we continue to enhance and extend our products and technology at Google.”
The deal will likely draw scrutiny, and is especially likely to generate complaints from competitors such as Yahoo. Google is already under the microcope in Washington. Recent reports say it may be investigated for its “accidental” wireless data collection. And everybody is awaiting the announcement that the FTC will closely investigate its bid to acquire Admob, a mobile advertising company.
Oh, and a privacy group wants the FTC to look into Google’s cloud-computing services, to see if they are secure. You can read about all their gripes here.