Search giants hear voices

Net telephony catches ears at Yahoo and Google. Also: Is Skype on anyone's shopping list?

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, Calif., 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.

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What's new:
Will the lure of Internet telephony draw search and portal giants Yahoo, MSN and Google?

Bottom line:
As voice over Internet Protocol attracts companies large and small--including America Online--these three giants are taking a close look at the technology.

More stories on VoIP

"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.

Our first lovely contestant...
One company that has attracted attention among the Web giants is Skype, a peer-to-peer VoIP provider based in Europe that lets people make free international calls from their PCs. The appeal in Skype lies in its rapidly growing user base, although the company has not figured out how turn those users into a more powerful and profitable business.

Skype's Web site boasts more than 80 million downloads, 5.6 billion minutes served and more than 1 million people using the service at one time.

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