SMS through Google Chat in Gmail was discontinued
As of April 1, 2014, sending SMS messages to phone contacts through Google Chat in Gmail was discontinued for all supported mobile operators.
If you want to send text messages through a chat app, you can send and receive Google Voice text messages with Hangouts. You'll need a Google Voice phone number and to turn on texting in Hangouts.
Caroline is a Hangouts expert and author of this help page. Leave her feedback below about the page.