Google has just upgraded its free phone service, And it’s going to be a hit.

I’ve played with it and am sold. It adds free transcription to your voice messages on a tidy Web page, as well as SMS forwarding to your cell phone, and host of other goodies I’m convinced will make a lot of people run out and start using it. It’s free for national calls, and competitively priced for international calls. You can use it from your mobile phone ( — that’s right, free calls from your mobile phone. My favorite: a way to forward unwanted stalkers to a message that says your phone has disconnected.

To refresh your memory, Google acquired the service when it bought startup Grand Central in 2007. The service’s stated goal was to make your phone life as simple as possible. Core to that was to give you a single number. That number can then reach you everywhere, on all of your phones — with you controlling exactly who can reach you when and where. So you can give out that number, and have it directed to your home phone when you like, without ever giving out your home number. You can choose to have all your mother’s calls go through to your home line and ignore them at work. And you can have your wife’s calls go through to your work phone.

The service was already pretty useful — that is, if you didn’t mind adopting yet another phone number (the new number was the biggest trip-up for people; all of us already have a phone number, and most would rather not have to start giving out another). But Google Voice might convince you to make that step.

So far, the service has been limited to a “few hundred thousand users” — those lucky enough to have signed up with the service before it was closed in 2007 in order to ready it for mass usage.

I was one of those original users. However, after I signed up, it wasn’t quite useful enough for me to become a permanent convert. I’ve let the number languish. But co-founder Vincent Paquet showed me the latest upgrade yesterday, and it’s a no-brainer. I must have it! Why? Well, I’m tired of plowing through my voice messages and having no way to skip past ones I don’t care about. With my existing service, I also can’t skim through the messages easily to pinpoint that one relevant place where the person gives me their phone number so I can call them back.

Google’s dashboard provides the entire text of messages, and its search bar lets me search it all.

The new service was introduced to existing customers on March 12. Users must log into their existing Grand Central account and then follow directions for migration to the new service. New users will be allowed to access the service within the “next few weeks.

”The transcription is the best new feature. It transcribes every voice message into text and lists them on a page where you can read them all. The Google Voice dashboard page is integrated with your other Google apps and is accessible through your Gmail account, just like your other apps. You can choose a whole range of options in your settings: You can have the voice messages forwarded to your phone in the form of an SMS, so that you have everything on your mobile phone — you can click to listen to the original message or see the message transcribed. You can choose what exact hours a particular person can reach you at, say, your home number, and what hours they’re transferred to your cell, or directed immediately to voice mail.

The product falls into Google’s mission of organizing information. Project leader Paquet said Google realized voice is a big void in its search offerings. Lots of people like using their voice, especially when they’re driving. And they talk with their closest friends on the phone, making voice some of their most crucial personal communication. Paquet has been working on the product since 2007, with a growing team.

He says there’s a $1 trillion market for international calls, so Google has a way to make money from this too.

The service offers a host of other features:

  • In the transcribed text, lighter font shows you where Google isn’t certain of the exact wording (see image above). Darker font shows where Google is more certain. I’ve blotted out the incoming numbers with red squares to protect the numbers of friends who tried this out.
  • You can share your voice messages with other people, clicking to get code so that you can embed the messages on any Web page. You can download them if you want.
  • You can report people as spam, so they won’t ring through to any phone (Google also tracks calls across its network, and when it notices that hundreds of thousands of calls are being made from a single origin number, it can choose to block that as spam).
  • My favorite: You can send someone to a message that says, “We’re sorry, you’ve reached a number that is no longer connected.” The message is the same message you’re used to hearing when you call a bad number, so it’s quite convincing.
  • It uses the same contact list in your existing Gmail account. You can import contacts from most other sources if you want.
  • When using the SMS feature, if there’s a number listed in the message, you can click on it to make a call out.
  • It allows conference calling from your phone for up to six people.
  • The international rates are competitive with other services such as Skype. For example, it costs 2 cents per minute to call most European countries in the middle of the day, or 15 cents to reach a cell phone there. That compares to about $1.50 if you use your regular carrier to make such a cell phone call.
  • It interfaces with other services that are open. So while it won’t let you accept calls from people using your Skype handle (because Skype’s protocol is proprietary), it does work with SIP-based services like Gizmo.
  • It offers transparent billing information with things like the time of day you called, how long you called for, who you called, where and how much it cost.
  • You can add notes to your messages.
  • You can add personalized greetings for specific people.
  • If you’re using an Android phone, incoming calls can pull up the picture of the person calling you.

The transcription, like other services, does have limitations. It works less well for people with heavy accents, for example, or for people speaking at a loud train station. Google’s service is one of the only ones on the market that is fully automated. Most other services rely in some way on human intervention to help with transcription — usually cheap workers in India.

This will not be one of those services axed due to lack of users.