Yahoo's new online phone calls near
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By Michael Bazeley
Yahoo is expanding its reach in the fast-growing Internet calling market, offering a service that will allow people to make and receive low-cost computer calls to and from regular phones.
The long-expected move could make the Sunnyvale company one of the biggest players in the Internet phone-calling market, along with eBay-owned Skype Technologies, Vonage and others.Yahoo would not say when it will launch the service, but the date is expected to be unveiled soon.
Yahoo has long allowed people who use its Yahoo Messenger service to make free, computer-to-computer voice calls to each other. But that market is limited.
With the new service, the estimated 82 million people worldwide who use Yahoo instant messenger will be able to call any traditional fixed or wireless phone number in 180 countries. They will also be able to purchase a phone number with which to receive calls. The service comes with a free voicemail box.
Although the calls will not be free, they will be extraordinarily inexpensive -- a penny a minute to anywhere in the United States and less than 2 cents a minute to more than 30 countries, including China, Japan and Sweden.
``These prices, in most cases, offer dramatic reductions over other competitors out there,'' said Jeff Bonforte, senior director of voice product management for Yahoo.
Bonforte, president of SIPphone before joining Yahoo earlier this year, said that even with the low pricing, Yahoo should enjoy a nice profit margin. Because of its size, Yahoo was able to negotiate appealing prices for the calling minutes it needs to buy from phone companies.
The company briefed media outlets on the news earlier this week under agreements that they would not publish it until the service launched. The Mercury News is publishing the news today because Yahoo said that another publication intended to break the news embargo.
The number of companies offering Internet calling -- also known as Voice over Internet protocol, or VoIP -- has soared in recent years as high-speed Internet use becomes more common. Most companies charge a monthly rate and their services are designed to be used as regular phones, except that the phone plugs into an Internet connection instead of a traditional phone network.
AT&T, Vonage, Comcast, AOL and Packet8 are among the myriad companies with VoIP calling plans.
Another class of VoIP services, which Yahoo is now entering, lets users make calls through their computers. Skype, with about 2 million users, has dominated this computer voice market, especially overseas, where international calling rates are expensive. But Google has recently entered the market with Google Talk, and there are a host of smaller companies that offer similar services.
Skype, which eBay recently acquired for about $2.6 billion, would appear to face the most immediate potential threat from Yahoo's new product.
Yahoo's rates are lower than Skype's, which charges about 2 cents a minute to make calls to most regular phones in the world. Yahoo will charge $30 a year to purchase a phone number for incoming calls; Skype charges $35.
VoIP consultant Andy Abramson said that Yahoo's deep pockets allow it to force Skype into a price war.
``Yahoo can toy with Skype,'' said Abramson, chief executive of Comunicano.
Abramson said Yahoo has another advantage -- the ability to integrate voice across many other parts of its vast network, from e-mail to music and gaming.
``Yahoo has all those community and content assets to lay into the voice thing,'' he said.
Despite all its advantages, Yahoo will face challenges marketing its service. Americans have still not embraced computer phone calling in large numbers. And most U.S. mobile phone plans offer free domestic long-distance phone calls.
But Abramson said the younger generation of Internet users are rapidly becoming accustomed to Internet phone calling. And Yahoo will able to use its popular Web site to promote the service.
``We expect the attractiveness of rates, the quality of the service and the Yahoo brand to make it appealing,'' Bonforte said.
Article submitted by: Webshark
Last Update: 12-07-2005
Category: Yahoo!
Yahoo is expanding its reach in the fast-growing Internet calling market, offering a service that will allow people to make and receive low-cost computer calls to and from regular phones.
The long-expected move could make the Sunnyvale company one of the biggest players in the Internet phone-calling market, along with eBay-owned Skype Technologies, Vonage and others.Yahoo would not say when it will launch the service, but the date is expected to be unveiled soon.
Yahoo has long allowed people who use its Yahoo Messenger service to make free, computer-to-computer voice calls to each other. But that market is limited.
With the new service, the estimated 82 million people worldwide who use Yahoo instant messenger will be able to call any traditional fixed or wireless phone number in 180 countries. They will also be able to purchase a phone number with which to receive calls. The service comes with a free voicemail box.
Although the calls will not be free, they will be extraordinarily inexpensive -- a penny a minute to anywhere in the United States and less than 2 cents a minute to more than 30 countries, including China, Japan and Sweden.
``These prices, in most cases, offer dramatic reductions over other competitors out there,'' said Jeff Bonforte, senior director of voice product management for Yahoo.
Bonforte, president of SIPphone before joining Yahoo earlier this year, said that even with the low pricing, Yahoo should enjoy a nice profit margin. Because of its size, Yahoo was able to negotiate appealing prices for the calling minutes it needs to buy from phone companies.
The company briefed media outlets on the news earlier this week under agreements that they would not publish it until the service launched. The Mercury News is publishing the news today because Yahoo said that another publication intended to break the news embargo.
The number of companies offering Internet calling -- also known as Voice over Internet protocol, or VoIP -- has soared in recent years as high-speed Internet use becomes more common. Most companies charge a monthly rate and their services are designed to be used as regular phones, except that the phone plugs into an Internet connection instead of a traditional phone network.
AT&T, Vonage, Comcast, AOL and Packet8 are among the myriad companies with VoIP calling plans.
Another class of VoIP services, which Yahoo is now entering, lets users make calls through their computers. Skype, with about 2 million users, has dominated this computer voice market, especially overseas, where international calling rates are expensive. But Google has recently entered the market with Google Talk, and there are a host of smaller companies that offer similar services.
Skype, which eBay recently acquired for about $2.6 billion, would appear to face the most immediate potential threat from Yahoo's new product.
Yahoo's rates are lower than Skype's, which charges about 2 cents a minute to make calls to most regular phones in the world. Yahoo will charge $30 a year to purchase a phone number for incoming calls; Skype charges $35.
VoIP consultant Andy Abramson said that Yahoo's deep pockets allow it to force Skype into a price war.
``Yahoo can toy with Skype,'' said Abramson, chief executive of Comunicano.
Abramson said Yahoo has another advantage -- the ability to integrate voice across many other parts of its vast network, from e-mail to music and gaming.
``Yahoo has all those community and content assets to lay into the voice thing,'' he said.
Despite all its advantages, Yahoo will face challenges marketing its service. Americans have still not embraced computer phone calling in large numbers. And most U.S. mobile phone plans offer free domestic long-distance phone calls.
But Abramson said the younger generation of Internet users are rapidly becoming accustomed to Internet phone calling. And Yahoo will able to use its popular Web site to promote the service.
``We expect the attractiveness of rates, the quality of the service and the Yahoo brand to make it appealing,'' Bonforte said.
Article submitted by: Webshark
Last Update: 12-07-2005
Category: Yahoo!
Current rating: 5.71 by 38 users
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