AOL adds to its IP telephony portfolio

New AIM Phoneline is part of company's strategy to open its Internet products to non-AOL members.

AOL is pushing farther into the Internet Protocol telephony market with its latest product that allows instant-messaging users to make calls to and receive calls from regular phones.

AOL has already had a "talk" button integrated into its instant-messaging client, but previously it only allowed users to talk to other AIM users online from computer to computer. Beginning May 16, AOL users will be able to use AIM Phoneline, which allows them, from their IM client, to talk to people who are using regular phones.

The basic version of AIM Phoneline is free and allows AOL's instant-messaging users to get a local telephone number where they can receive phone calls. If the AIM user isn't online, the call goes directly to voice mail, which can be retrieved from an e-mail account. Users can also make free unlimited local and long-distance calls in the U.S. Canada, and 30 other countries.

AOL users can also subscribe to an unlimited service for a monthly fee of $14.95 (a limited number of subscribers will get a special rate of $9.95 per month). The unlimited service allows users to call landline or cell phones from their IM client using the AIM phone number.

"Phoneline is really for people who want to have an extra phone number," said Alex Quilici, vice president of AOL voice over IP services and business manager for AIM Phoneline. "These are people who may have an online business or they want people from their online social network to call them, but they don't feel comfortable giving out their home or cell phone numbers."

Last year, AOL introduced a VoIP service called TotalTalk, which competes against services such as Vonage. Unlike AIM Phoneline, TotalTalk allows users to use a regular telephone that is attached to a device that routes their calls over the Internet. Quilici said TotalTalk and AIM Phoneline do not compete with one another.

"TotalTalk is designed as a phone line replacement," he said. "It is going after a totally different set of users than the ones that AIM Phoneline is designed for."

Quilici also said that AIM Phoneline is an important part of AOL's strategy to open its Internet products to non-AOL members and drive more revenue from advertising. Every time an AIM user checks for voice mail messages, listens to messages or makes calls from the AIM client, he generates page views, Quilici said. These page views ultimately generate revenue when the company goes to sell advertising.

"The AIM user base is very important to AOL," said Joe Laszlo, an analyst with Jupiter Research. "Unlike the AOL subscribers, they aren't losing thousands of them a quarter. And features like this may help keep the users they have loyal to the AOL brand."

But AIM Phoneline isn't the only IM-based voice service on the market that allows people to make and receive calls to regular phones. Skype and Yahoo also offer these features. Quilici said the biggest differentiator between AIM Phoneline and these other services is that AIM Phoneline allows users to receive calls from regular phones for free while Skype and Yahoo charge a fee. Skype offers its SkypeIn service for 12 months for about $56, and a three-month subscription is about $19.

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