TELECOM Digest OnLine - Sorted: Yahoo Sees Larger Opportunity in Voice Services

Yahoo Sees Larger Opportunity in Voice Services

Lisa Minter (
Fri, 10 Jun 2005 19:35:10 -0500

By Justin Hyde

Internet services company Yahoo Inc. is looking to boost its business
in the Internet's next big growth area -- voice communications.

The largest U.S. provider of Web e-mail services, Yahoo already has
deals with several landline and wireless telephone companies,
including SBC Communications , Verizon Communications Inc. and Sprint
Corp. , for a variety of Web-based services.

In addition to voice services, Yahoo is also expanding the reach of
its e-mail service, saying earlier this week it would allow Sprint
wireless customers to manage their e-mail accounts through their cell
phones. Last month, Yahoo announced an upgrade of its messenger
service, boosting the ability to make free voice calls between

For what the future could hold, Yahoo points to its deal with
Britain's BT Group Plc , which sells the BT Communicator -- a version
of Yahoo's Messenger that can not only handle voice calls between
computers but make and receive telephone calls.

"We view voice as a fundamental aspect of the instant messaging
experience," said Brad Garlinghouse, vice president of communications
products for Yahoo, in an interview Thursday with Reuters. "We will
continue to enhance and expand the voice functionality within

The market for the intersection of computer messaging and telephone
service has been dominated by Skype, a European software company. The
free Skype software allows users to call to any other Skype user
globally for free and to make and receive calls at low cost. With
little advertising, Skype typically has up to 3 million users online.

Garlinghouse declined to offer specifics of Yahoo's future plans for
voice services. But officials at SBC say they were considering a
Skype-like service that could be sold with Yahoo.

"We could put one together real quickly," said Scott Helbing, senior
vice president for consumer marketing, in a recent interview with
Reuters. "We don't have that service right now, but we're interested
in it and we're investigating time to market and the services that are
out there."

Garlinghouse said Yahoo preferred to work with telephone companies
like BT and SBC instead of pursuing customers independently.

"By working with the carriers, we've found there's a very nice
symbiotic relationship," Garlinghouse said. With voice messenger
services, "one of the nice things with working with BT is it allows us
to deliver a much higher call quality."

Garlinghouse said Yahoo saw an opportunity to simplify the growing
sprawl of customers' e-mail accounts and voice mail boxes. As part of
the SBC deals, SBC customers will be able to access voice mails
through Yahoo's e-mail service.

"You're seeing these huge collisions occur, and over time we won't
think about ... voice mail, e-mail, or IM," he said. "I think we'll
increasingly think about it as 'I have an inbox."'

Copyright 2005 Reuters Limited.

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