Yahoo extends phone calling via IM

Yahoo Inc. has begun allowing users to make telephone calls and search the Internet via its instant messaging system instead of relying only on Web browsers or e-mail, the company said Monday.

"IM is becoming the hub of the Internet experience for teens and tweens," Joe Laslo, an analyst with Jupiter Research in New York, said of how teenagers and "tweens," or children between the ages of nine to 12 years old, are making IM the center of their online activities.

The upgrade of Yahoo's instant messaging service is designed to attract and hold a youthful audience used to using broadband Web connections, while fending off rival moves in voice-calling, analysts said.

The focus on voice and other enhancements in Yahoo's instant messaging service follows similar improvements that competitor America Online has made in its AIM service. Yahoo is No. 2 behind AIM, according to ComScore Media Metrix data.

Yahoo, of Sunnyvale, California is also trying to head off the rising popularity of the Internet phone calling service Skype, which has caught fire among young users across Europe and now boasts some 48 million registered users of its free call software around the world.

"Skype is approaching IM from the voice-based communications world," Laslo said. "It is clearly on a collision course with the Big Three of IM (AIM, Yahoo and Microsoft Messenger) who have focused on text communications."

The new Yahoo service, renamed "Yahoo Messenger with Voice," boasts high-quality voice calling capabilities allowing consumers to make phone calls between personal computers to friends and family anywhere in the world.

"We feel like we are doing a great job of listening to our users... by taking PC to PC voice-calling technology and turning it a really easy user experience," Fraizer Miller, Yahoo's director of messaging services, said in an interview.

Yahoo Messenger incorporates a version of Yahoo's search system into instant messaging (IM) conversation. Users can highlight a term from an IM conversation and quickly view the search results, or news headlines tied to that term of phrase.

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The service, called "LiveWords," allows IM users to search for background on, for example, actor Clint Eastwood, or a stock quote, like YHOO. LiveWord focus on news, sports, entertainment, education and financial terms, Miller said.

In addition, Yahoo Messenger with Voice will include free voicemail, photo-sharing and greater spam protection.

Yahoo is also making it easier for instant messaging users to share blog postings, photos, movie and music rankings and personal profiles in a further example of how IM is moving to the center of the Yahoo user's universe.

Outside the United Sates Yahoo! Messenger with Voice is available in 18 localized versions for Argentina, Australia, Brazil, Canada, China, France, Hong Kong, Italy, Germany, Korea, Mexico, Russia, Spain, South Asia, Taiwan, United Kingdom and across Latin America, with Yahoo! en Espanol.

Yahoo said that since it launched final testing, millions of users have begun testing the new service.