I use hangouts for everything, even use it as my phone dialer. I am mostly just dealing with 5 or 6 clients besides my family. From a single list I have access to all ways of communication. I don't ever use my contacts. This worked flawlessly on my s3, however I recently upgraded to m8, and the SMS integration is not as smooth. The SMS option, and subsequent phone options isn't available automatically when in a hangout. You have to find the contact and send a SMS before the option comes up. Don't know if this is a bug of a recent update, but on the s3,if a contact had a google addy and a phone number, the option of which to pick was present right away.
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