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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.

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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.