Google Hangouts is a communications platform by Google.
The comms platform allows users to communicate with contacts via instant messaging, video chat, SMS and VOIP.
It replaced several separate messaging products, including Google Talk, Google+ Messenger and Hangouts, originally a video chat system for Google+ users.
Hangouts runs in the background and notifies you of new messages and incoming calls with animated notifications.
This uses Voice over IP technology, sending the calls as ordinary internet traffic rather than as a conventional voice call. The calls can therefore be sent as data over 3G or wi-fi, meaning that they can be completely free.