ICQ gets vocal with telephony

America Online's ICQ today said it will partner with Internet telephony company Net2Phone to give ICQ users the ability to make phone calls over the Net.

The two companies signed a four-year, multimillion-dollar pact to create Internet telephony services for ICQ, the firms said.

"This is a logical extension of what we're doing now. The heart of our communications platform is to help people find other people and communicate," Donn Davis, chief operating officer of AOL's Interactive Properties Group, said in an interview.

Next spring, ICQ will start integrating Net2phone's technology into its software. ICQ users will be able to make phone calls from computer to computer, computer to regular phone, or regular phone to computer, Davis said. Users can make calls by speaking into the microphone of their computer.

"We want to make voice communications on ICQ easier over time so people find it a fun, convenient, and helpful thing," he said.

ICQ supports Internet telephony software from some 30 companies, including Intel, Microsoft, and Netscape. But the software is not integrated with ICQ's client, so it is a bit unwieldy to use, Davis said.

"Right now, it's not an integrated offering. You have to launch a separate program, and it's a few clicks away," Davis said, referring to the other software. "We want to make it no additional software and a click away. You simply click on your ICQ buddy list and initiate a voice connection."

The computer-to-computer calls will be free, but the computer-to-phone calls will come with a price tag, the firms said. Net2Phone currently charges 4.9 cents per minute for domestic calls and 10 to 20 cents per minute for international calls.

Today's AOL deal--and the ability to reach ICQ's 38 million users--is a potential boon for Net2Phone, which has pushed to get its software to mainstream audiences. In the past year, the company--which recently filed for an initial public offering--has struck deals with AOL for the Navigator browser, Yahoo, Excite, and others.

Internet telephony technology has improved in recent years, but the market is still maturing, analysts say. While it's still a novelty to many Web surfers, analysts believe the demand will skyrocket in coming years as companies improve the quality of Net calls and offer unique features such as video conferencing and unified messaging. That would allow faxes, phone calls, and emails to be retrieved from a single point.

"Imagine if you're a teenager and have one phone line in the bedroom and want to make phone calls and be on the Net at the same time," said analyst Hilary Mine of Probe Research. "It's a nice, convenient way to make good use of a single line."

Net2Phone, which says it has more than 1 million users, gains a big distribution channel for its technology with today's ICQ deal, Mine said.