Sending SMS from Google Hangouts Desktop

I've been a long time user of Google Voice. When Google made the conversion allowing talk, SMS, and Hangouts from one application, I switched over right away. There was one thing that I thought was an oversight or feature that was lacking since the change. I could never seem to initiate a SMS message right from the new Hangouts Extension. I'd have to start an SMS message from my phone, the continue the conversation on my computer.

When typing a name in the search box in the Hangouts desktop application, I would get long lists of Google+ users and never find the contact I wanted like when I used to SMS with the Google Voice page. I just chalked it up to a oversight figuring it would be a feature that would get added down the road. 6 months later, no...

It turns out it was there all along. Simply click on the Hangouts Icon in Chrome:

This will bring up the Hangouts Application on your desktop. Click on "New Conversation"

But then notice the telephone icon that pops up. Click on that!

Type in a name that is in your Gmail contacts or a phone number like below, and then hit Send SMS. 

Maybe I am the only one who didn't know this, but I thought I'd post this just in case. I'd just figured the phone icon had to do with out going calls, and it does, but you also get SMS with your contacts, and not have to try and sort through all the Eric Smiths in G+