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Price war brewing in Web conferencing

Verizon answers rival WebEx's Web conferencing discount with a price cut of its own, in a bid to spur business for the recently introduced service.

Verizon Communications is discounting its Web conferencing service, engaging in a mini price war with rival WebEx as they each bid to pull in new subscribers.

The Bedminster, N.J.-based company is slashing the price of its 3-month-old Web conferencing service to 25 cents per minute for people who sign up during the next three weeks, said Verizon spokeswoman Catherine Hogan Lewis. The per-minute charge will return to 50 cents April 1.

"This will give (subscriptions) a goose," Lewis said.

Competitor WebEx, which sells more Web conferencing than any other company, is running a promotion this month that offers $1,000 in savings on a corporate subscription, according to a notice posted on its Web site. The San Jose, Calif.-based provider's service is usually resold by telephone companies.

Web conferencing combines a telephone conference call with an online "white board" to let participants view the same presentations. The necessary equipment for Web conferencing--a telephone, a personal computer and an Internet connection--are staples of most businesses.

Such conferencing service costs an average of 33 cents per minute, according to Frost & Sullivan analyst David Alexander. He said he expects to see promotions and price cuts from other Web conference players, which include telecommunications companies SBC Communications and BellSouth.

"Carriers need to do these discounts to help increase awareness," he said. "It's not a very well-known service just yet."

U.S. businesses scaling back on travel costs spent $246 million on Web conferencing last year and will spend $367.5 million this year and $1.24 billion in 2007, according to research from Frost & Sullivan.