When Michael profiled the Gizmo Project in July 2005, he noted that it had more features than Skype, but lacked instant messaging. The one time Skype competitor has become the Jaiku to Twitter, having pretty much dropped off the radar as Skype was acquired by eBay and went on to become the leading desktop VOIP/ IM solution.

The open source SIPphone owned Gizmo has continued to be developed, and this week added MySpace IM support on top of support for MSN, Yahoo, AIM and Jabber (including Google Talk). Today’s Gizmo is more IM platform than predominantly VOIP platform, and it makes for a fairly decent product.

Gizmo offers an attractive feature set. On top of the wide IM support that makes it a competitor to Adium and Trillian, the VOIP side offers competitively priced calls to external numbers, as well as free calls to those using the SIPphone platform. Services such as file transfer are supported, although video calling is only supported between Gizmo users, and not with users on other services. Cross platform voice chat is supported however.

Notably Gizmo 5 can be installed on a range of mobile phones and run locally, complete with VOIP calling, a decent value add if you’re on an unlimited data plan with your mobile phone. Unfortunately there isn’t a version (site or download) for the iPhone yet so I was unable to test it.

Gizmo has long since lost the battle against Skype to become the dominant VOIP service, however if you’re looking for a fully featured mobile IM client that also offers cheap calls it might be worth a look again.

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The open standards based internet telephony service Gizmo Project made a drastic move today by dropping the cost to zero for all calls to any phone owned by a Gizmo user in 60 countries, permanently. It’s not quite free calls to everyone everywhere, but it’s a big move away from the standard revenue model of charging for all calls to land lines and mobiles. Both parties on the call will need to have logged into and used a Gizmo account recently enough to be considered active.

Gizmo was founded just 13 months ago by a team that includes Michael Robertson, the founder of SIPphone, MP3.com, AjaxLaunch and a variety of other projects.

Additional features that Gizmo has offered for some time include very nice one-click recording, $3/month call-in telephone numbers in 50 US and UK cities and a partnership with FreeConferenceCall.com. The use of open standards means that Gizmo is not a siloed service and can make calls across any other VOIP network that participates.

It’s been an incredibly compelling service for some time, only lacking the huge user base that Skype has. I use it to record calls and would use it all the time if other people did. As Skype languishes in a post-acquisition eBay abyss, today’s announcement will likely move Gizmo into a much better position in terms of number of users.

What does this mean for the industry? If calls continue moving towards free, then it’s going to be all about the value-added features. Video, better conferencing support, SMS - I can only imagine what sorts of features VOIP providers will be able to find substantial profit in. Perhaps these consumer VOIP services will have to make consumer VOIP a loss leader in exchange for building the strength of enterprise VOIP offerings. Ad supported free calls could be acceptable if the ads appear on the web interface. It’s hard to say what could take the place of burning through VOIP-out minutes, but interesting things will likely emerge.

Most likely this free VOIP future is still a ways off. Most paid calls out of the system are probably made to land lines owned by people who never use Gizmo or any other VOIP service. This greatly mitigates the impact of today’s announcement and you could almost call it little more than a cynical marketing move. As a proof of concept, though, it shows that VOIP to land and mobile numbers can be done for free. Skype does this intermitantly to land lines in different countries. We’ll have to see if Gizmo’s approach finds traction and builds its user base.

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Company: Gizmo

Launched: June 30, 2005