Yahoo! takes on Skype

By Steve Malone

Posted on 9 Dec 2005 at 10:55

The Yahoo! Internet portal is extending the use of its VoIP capacity built into its Instant Messenger product to take on Skype. The company says that within the next few days it will be debuting a new service 'Phone Out', with cheap call charges from computers to phones, and 'Phone In', a budget priced subscription service for phone callers to call computer users.

Using the Phone Out service, calls to the US will cost $0.01 per minute to the US and less than US cents per minute to more than 30 international countries, including Argentina, Australia, China, France, Germany, Italy, Japan and Korea. Yahoo! will also offer pay-as-you-go credit in $10 and $25 increments. The current SkypeOut rate is 1.2p or €0.017 or US $0.023 per minute for calls to most popular destinations around the world.

The Phone In service allowing users to receive calls on a PC from land lines or mobile phones will cost $2.99 per month or $29.90 per year.

Yahoo! is not entirely new to the VoIP market. The company has been offering voice services via Yahoo! Instant Messenger product for some years. However, the calls were only between IM users only which remain free. This is the first time that the Internet portal has launched VoIP as a major initiative in its own right and is clearly a stab at both Google's recent Click to Call promotion and VoIP pioneer Skype.

The company feeling most queasy about this turn of events is eBay. Having bought Skype for $2.6 billion back in September of this year, the company has seen both Google and Yahoo! now enter the market for free VoIP services and both Google and MSN offering classified ads.

Further details of Yahoo!'s VoIP pricing policy are at voice.yahoo.com.