Yahoo Updates Messenger's Phone Features

Juan Carlos Perez, IDG News Service

Yahoo plans to upgrade Yahoo Messenger with a capability that lets users dial out from the instant messaging service interface to traditional or mobile phones, a Yahoo executive says.

Cheap Calls

Yahoo Messenger users will also be able to rent one or more phone numbers from Yahoo to receive phone calls through the instant message (IM) interface, said Jeff Bonforte, the company's senior director of voice product management.

Calls made from within Yahoo Messenger to U.S.-based phone numbers will be priced at 1 cent per minute, while calls to 30 other countries with heavy telecommunications traffic in Europe, Latin America, Africa and Asia will cost under 2 cents per minute, he said.

Calls can also be made to over 150 other countries, and rates vary, he said. The rates are based on where the call terminates, not where it originates, Bonforte said, so it would cost someone in, for example, Singapore or Brazil one cent per minute to call someone in the U.S.

To use this feature, which Yahoo calls "phone out," Yahoo Messenger users need to prepay for the calls in chunks of either $10 or $25, but the unused credit never expires, so a user could theoretically buy $10 worth of calls and take years to spend the amount, he said.

Yahoo Messenger has had PC-to-PC voice communications for years, and it has offered users a fee-based option to dial out to a phone number using the third-party Net2Phone service.

However, this voice capability is now being tightly integrated with Yahoo Messenger and will be threaded into various other Yahoo online services in the future, he said. Yahoo views voice communications not as an IM-specific feature but rather as an application that is becoming key to interacting online in general.

"This is just the beginning for Yahoo" in the voice space, Bonforte said.

Sounds Good, Says Analyst

Users will be able to obtain one or more phone numbers for $2.99 monthly or $29.90 per year to receive calls from regular or mobile phones via their Yahoo Messenger interface. To start, only U.S., U.K. and French numbers will be available. However, Yahoo Messenger users worldwide can get U.S. or U.K. numbers, Bonforte said. So, for example, someone living in Germany who speaks often with people in San Francisco and New York, can get local numbers for those U.S. cities. French numbers are restricted to residents of that country, he said.

Yahoo hasn't yet announced when the new Yahoo Messenger version with these phone-out/phone-in capabilities will become available.

While eBay's Skype is the undisputed leader in PC-to-PC voice communications, Yahoo does well to integrate this functionality into Yahoo Messenger and into its other online services, an analyst said. That way, Yahoo will make it convenient for its users to engage in PC-to-PC phone calling, both for those who also use Skype and for those who don't, said Yankee Group analyst Kate Griffin.

"It definitely extends the value and functionality for users," she said.

Note: PC World has a partnership agreement to provide content to Yahoo News.

Copyright 2005 PC World Communications, Inc.

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