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Initially a beta service in the US, Lycos Phone could prove a popular rival to Skype if its call quality matches that of its bigger rival.

It might also give the lie to Skype's business plan, as some of the services that Skype is counting on to provide it with revenue streams are free on Lycos.

Lycos also does a good job of providing offline services, so calls can be redirected to fixed line or mobile phones.

The service run-down goes like this: Lycos Phone offers free PC to PC calls and of course the software itself is free. It also boasts instant messaging and presence features

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and functions as a media player. This means video calls are possible - again free - as is the ability to play MP3 files and streams of IPTV content. Video on demand services are also planned. You can also make cheap calls to fixed line and mobile phones as well as international calls at prices on a par with its competitors.

But Lycos Phone also offers voicemail services for free while Skype charges $18 a year. And a US phone number for a Skype account costs around $36 a year. With Lycos, it's free. Lycos is even planning a fax service imminently.

The flip side of this is that unlike Skype, you'll be expected to receive banner ads and commercials.

'This partnership with Globe7 allows Lycos to team with a best-of-breed global platform, leveraging Globe7's real-time communications infrastructure to provide other innovative services like Internet Protocol television,' said Alfred Tolle, CEO of Lycos. 'We are in a very unique position to now provide this audio and video distribution platform to our millions of independent content creators throughout the Lycos Network.'

For launch, Lycos Phone will be a Windows only affair. But Globe7, the company building the service, promises support for Mac OS X, Palm OS and Pocket PC.