Yahoo Puts Big Bucks Behind Internet Telephony

20 May 2005

Internet portal Yahoo has launched a new high-testosterone version of its instant messenger service with a facility that will enable users to make free voice calls across the planet via their PCs.

According to analysts - a breed never shy of stating the obvious in return for a plug - Yahoo's move will prove a major boost to the adoption of internet telephony.

Radicati Group market analyst Marcel Nienhui demonstrated his insight into such matters: "It's a live communications method as opposed to email, which it not realtime," he explained.

The new service not only brings Yahoo into line with AOL and Microsoft's MSN, it also puts it eyeball-to-eyeball with UK start-up Skype, a highly popular free internet telephony service which the company claims has been downloaded by 112 million people.

The British service also allows users to make calls to ordinary telephone lines, a feature instant messenger technology cannot yet provide.

Analyst Nienhuis again paraded his perceptiveness: "The whole voice-over-IP market has been around for a while but it hasn't quite caught on. Yahoo and MSN have the ability to bring it to the mainstream because they already have a user base to build on."

Yahoo says it has essentially "ripped out the old plumbing and put in new technology". This not only improves the service's audio quality but also provides true duplex transmission. It includes voice mail, a call-history archive and personalized ringtones.

According to ComScore Media Metrix, AOL leads the instant messenger market with 45 million US users, split roughly 50/50 between subscribers to its paid internet service and users of its free facility. Next in line is Yahoo with almost 19m users, trailed by MSN with around 14m.

Data sourced from Financial Times Online; additional content by WARC staff