TELECOM Digest OnLine - Sorted: Big Players Enter VOIP Game

Big Players Enter VOIP Game

Ben Charney (
Tue, 20 Sep 2005 23:30:06 -0500

Ben Charny - eWEEK

Five years after pioneering Internet telephony in the United States,
America Online, Yahoo and Microsoft's MSN are finally taking the
business seriously.

And that, said analysts interviewed Tuesday, could spell trouble for
hordes of companies that subsequently introduced their own telephone
services based on VOIP (voice over Internet Protocol), software that
allows an Internet connection to double as an inexpensive home phone

On Tuesday, early VOIP pioneer America Online Inc. introduced
TotalTalk, a very much revamped version of a VOIP service that AOL
first introduced five years ago. Just how much more serious is AOL
about the phone business now?

"This release increases our addressable market by a factor of 25,"
said Ragu Kamel, AOL senior vice president and general manager of
voice services.

Click here to read more about AOL's release of IM and VOIP tools.

TotalTalk is part of a recent waive of renewed interest in inexpensive
Internet telephony from AOL and its major competitors Microsoft
Corp. and Yahoo Inc., which all introduced VOIP plans five years ago
as part of a strategy to create a single Internet destination for any
number of different applications, such as search, e-mail and instant

Google Inc., the world's most popular search company, is often grouped
into this lot, having introduced many of the very same types of
different services.

Analysts have long held that by turning to VOIP, portals could
ultimately shake up the phone industry. Yet each company has done
little since to promote the services or improve them.

The relative inactivity until recently of the major companies has
helped Internet telephony newcomers like Skype Technologies SA, a
Luxembourg-based VOIP operator recently purchased by auction company
eBay Inc.; Vonage, a subsidiary of Vonage Holdings Corp. of Edison,
N.J.; and some major cable operators to steal the spotlight and garner
millions of paying customers.

But now it appears that all are bracing for more serious battle for
the phone business, having all in recent months significantly
sharpened their telephone offerings.

Read more here about eBay's VOIP strategy.

With customers reaching into the tens or hundreds of millions each,
analysts have long held that portals pose a big threat to leaders of
the traditional phone industry leaders Verizon Communications,
BellSouth Corp., SBC Communications Inc. and Qwest Communications,
known collectively as the Bells.

Yet, "the Bells aren't scared, the smart ones are already in the VOIP
business," said Andy Abramson, who writes the VOIP Watch Weblog. "MSN,
Yahoo, AOL and to some extent Google are all following a me-too, me
also strategy right now. We should see them start differentiating
themselves in the coming months," he said.

Following AOL's TotalTalk, Microsoft made similar moves on Tuesday
with its new partnership with local phone giant Qwest to sell phone
services to SMBs (small and midsize businesses.)

In recent weeks, Yahoo unleashed a revamped version of its VOIP
service, Yahoo Messenger with Voice, which provides new features and
improves upon calling quality.

Search giant Google, considered a competitor to Yahoo, Microsoft's MSN
and AOL as it moves further away from its search roots and into new
services, introduced its first version of Internet telephony a few
weeks ago as well.

Check out's VOIP & Telephony Center for the latest news,
views and analysis on voice over IP and telephony.

Copyright 2005 Ziff Davis Inc.

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