Search giants hear voices

[DevilDog#1]

Published: March 7, 2005, 3:55 AM PST
By Jim Hu
Staff Writer, CNET News.com

As the Net phone business starts to take off, can Web portals such as Yahoo be far behind?

That's one of the big questions that will be on the minds of Internet and telecom luminaries as they gather Monday in San Jose for Voice on the Net, a conference dedicated to promoting and exploring VoIP, the fast-growing technology for delivering voice calls over Internet Protocol.

Signs of activity in the space are growing, with America Online planning to enter the crowded VoIP arena later this month with its own phone service. That move has heightened speculation that on the horizon are similar announcements from AOL's biggest Web rivals--Yahoo, Microsoft's MSN and Google.

"We are definitely looking at the space closely," Yahoo spokeswoman Terrell Karlsten said. "We're figuring out how to enhance and expand into the voice space by leveraging those properties."

Yahoo and MSN have long offered rudimentary phone service using their instant-messaging software and a PC. Now there are signs that all of the major Web portals are exploring whether it makes sense to expand those offerings further. Yahoo has already launched a PC-based voice service in the United Kingdom. Microsoft plans to embed voice calling into its enterprise instant-messaging software. And rumors continue to swirl about whether Google is building the foundation for its own VoIP project, starting in the United Kingdom.

Google has not announced plans to offer VoIP service, and declined to comment for this story.

While none of the three has yet outlined a VoIP strategy, the technology is proving hard for them to ignore. Millions of people are signing up for cut-rate and free plans that route voice calls over a broadband connection. Dozens of competitors have jumped into the market, offering VoIP plans for as little as $14.95 a month, putting new pressure on traditional phone providers.

While that's great for consumers, it remains to be seen whether a VoIP play makes sense for Yahoo, MSN or Google. Yahoo and Microsoft could jeopardize important partnerships with telecom companies if they invest too heavily in voice services.

Despite potential risks, all of the portals have begun tentatively checking out VoIP providers to test possibilities, according to sources familiar with the talks.

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