Yahoo's new online phone calls near
Yahoo is expanding its reach in the fast-growing Internet calling market, offering a service that will allow people to make and receive low-cost computer calls to and from regular phones. — The long-expected move could make the Sunnyvale company …
Context & Ripple Effects
Yahoo's move lands at the end of a busy autumn of product pushes: a Skype-style calling capability added to its instant-messaging service was reported the same day by the Associated Press and picked up by PC Magazine, following November's confirmed plan to connect Yahoo's online services to TiVo's Internet-enabled set-top boxes. The company had already spent the fall broadening its consumer footprint, from a redesigned maps product to the TiVo tie-up.
The significance is positioning: internet calling is described as suddenly crowded, and Yahoo is entering it not with a standalone dialer but by bolting phone connectivity onto an existing messaging audience — turning Messenger into a communications hub rather than just chat.
First-order effects
- Yahoo Messenger users gain the ability to make low-cost computer-to-phone calls and receive calls from conventional phones, directly challenging Skype's hold on cheap PC-based telephony.
- Skype now competes against a portal whose calling feature rides on an installed instant-messaging base, changing the contest from brand-building to distribution.
Second-order effects
- Rival messaging platforms face pressure to match phone-call integration or cede Messenger ground as the default way people reach non-PC contacts, forcing voice features to become table stakes in chat clients.
- Standalone VoIP startups lose pricing headroom as large portals subsidize or bundle low-cost calling, squeezing per-minute rates across the young market.
Third-order effects
- If the bundling pattern holds, internet calling stops being a product category of its own and becomes a feature line inside big consumer platforms — the same consolidation logic behind Yahoo's TiVo set-top-box push toward the living room.
The trend: Internet telephony is shifting from standalone services like Skype to a bundled feature of major messaging and portal platforms, with Yahoo's December 2005 Messenger launch as a marker.