BigShinyThing

Competition for subscribers to services which offer cheap phone calls over the Internet is hotting up in the UK — you may have seen the ads for Vonage all over the tube and Metro this week touting their VoIP service. Late-starter Yahoo! plans to leverage its brand to win a slice of the pie.

Cutesy Skype Technologies currently leads the VoIP consumer market with more than 30 million users. Yahoo! therefore has a lot of catching up to do but its existing user base and brand will be a great help. AOL and Microsoft have both recently included voice capabilities into their messaging services as well. However, Yahoo! has the key emotional appeal that has been so well exploited by TiVo and Google, and now Skype. In The Economist this week, Paul Saffo of the Institute for the Future (what a great job!), says: “MSN and AOL are going nowhere … [they have] no soul, no passion.”

Yahoo! needs to take great care with its brand if it is to leverage this. VoIP has great emotional tug as a thing - Skype on its site talks about case histories of users who have ‘fallen in love via Skype’.

Last week, Yahoo! launched Messenger 7.0 which includes free PC to PC VoIP serice and voicemail. During beta trials in May, the company saw a two-thirds increase in voice usage among users. The full story is available via the rivetting Computer Business Review.