Google announced the release of Google Voice, an application that will let users to store transcripts of text and voice-mail phone messages in Gmail and then be able to search those messages.

Google Voice is an updated version of GrandCentral, a service that Google acquired in 2007. The new service positions Google opposite both Internet phone providers like eBay's Skype and traditional phone service companies.

The new application improves the way you use your phone, said Google Voice product managers Craig Walker, Vincent Paquet and Wesley Chan in a Wednesday night post to the Google blog.

You can get transcripts of your voice mail and archive and search all of the SMS text messages you receive. You can also use the service to make low-priced international calls and easily access Goog-411 directory assistance.

The application provides phone-related services such as automated voicemail transcription, SMS text-messaging storage, and a single number for all of an individual user’s various phones.

This could be big. Google is seen as disruptive, said analyst Jon Arnold.

They are a wild card in telecoms and wireless but this is Google and they are very smart at what they do.

Watch a video of Google explaining how it works:

Google Voice is free, though it may look for ways to make money from it. One of the most obvious ways is via targeted advertising based on the content of the calls the user makes. This will be similar to Gmail which already displays ads with keywords similar to the users email.

Privacy advocates are already concerned with the new application. Marc Rotenberg, executive director of the Electronic Privacy Information Center, when interviewed by the New York Times, has this warning about the service: In the privacy world, it is increased profiling and tracking of users without safeguards.