Google adds video chat to Gmail

Rather than sit and wait for Microsoft to make good on its promise of an online version of Office

, Google keeps adding more business-savvy features to Apps — this time a free, easy-to-use integrated web conferencing feature for Gmail. Combined with previous additions, like the ability to share YouTube videos, the moves should help Google keep its lead in the online productivity space, well after Microsoft’s Office 14 debuts.

The new web conferencing feature comes free with Gmail, and can be activated via the options menu by downloading a plug-in. It works with any XP or Vista PC, or Mac OSX computer configured with a web cam and microphone. It requires a Gmail-compatible browser, such as Google Chrome, Firefox 2.0 and higher, IE 7.0 and Safari 3.0. Current Gmail users can also install the plug-in via this installation link.

The new feature is H.264 standards-compliant, and the actual session bandwidth is pretty small, just 300K bit/sec in both directions, according to this report in InformationWeek. And that means that it could conceivably be developed for use on a mobile device, such as the G1 or iPhone–although Google hasn’t gone there yet.

For more on how it works, check out the video.