Update: AOL and Yahoo make IM VoIP moves

AOL and Yahoo separately on Tuesday made changes to the Internet telephony features within their IM (instant message) services.

The moves signal that both Internet giants believe that providing fee-based VoIP (voice over Internet Protocol) features is important to offer their users and to generate revenue via their mostly ad-supported IM services, AIM and Yahoo Messenger.

"The reality is that the AIMs and Yahoo Messengers of the world understand that just providing [text] chat down the road won't be enough, and that they need to provide [good-quality] voice and video communications," said Rebecca Swensen, IDC research analyst for VoIP services.

This market for personal, or consumer-oriented, Internet communication players is led by Skype, which has the largest subscriber base worldwide, she said. There's a related but different market for more formal residential VoIP services that run into a home, with players like Vonage and Comcast.

Although Skype also offers IM text chat, it entered the market primarily as a provider of voice communications, unlike Yahoo Messenger and AOL AIM, which started focusing on text chat and later added voice capabilities, Swensen noted.

Eager to propagate the use of AIM's Call Out service, which currently can only be accessed via PCs loaded with the AIM client software, AOL has released APIs (application programming interfaces) for this feature.

This Call Out feature lets people place calls to landlines and mobile phones from within the AIM interface for a fee to more than 200 countries. AIM also offers a free PC-to-PC voice chat feature called AIM Talk.

The so-called Open Voice APIs are designed so that developers outside of AOL can provide AIM's Call Out service via their Internet telephony applications and devices that support SIP (Session Initiation Protocol) and Wi-Fi connectivity.

This is the first time AOL has given external developers access to AIM's Call Out feature via APIs, said Brent Newsome, AOL's director of voice services. "We're trying to embrace the open community for the voice world," he said.

Because the service is based on open standards, it will be compatible out of the gate with a wide variety of softphones and devices, he said.

Using the APIs doesn't require special approval or obtaining a license from AOL as long as the Call Out application clients that developers build comply with the service's terms of service, Newsome said.

For now, the advantage for developers is to make their softphones or devices more feature rich and theoretically more appealing to their customers. However, AOL might later consider entering into revenue-sharing agreements with AIM Call Out partners, Newsome said.

Meanwhile, Yahoo has selected Jajah to provide the VoIP technology behind Yahoo Messenger's premium voice service, which lets its about 97 million users make and receive calls to and from mobile phones and landlines in more than 200 countries.

Jajah's technology will power this Yahoo VoIP service starting in the third quarter. The deal also calls for Jajah to handle payment processing and customer support.

Relying on a VoIP expert like Jajah makes sense for Yahoo and, in theory, for any online services player, including AOL, that lacks a broad expertise in this area, Swensen said. "There are a lot of technicalities and complicated logistics that go into providing voice, and if Yahoo can get someone to do it for them, it makes sense," she said.

This story was updated on April 29, 2008