Microsoft, MCI Hook Up for VoIP Deal

SEATTLE – Microsoft Corp. and MCI Inc. said Monday they'll soon offer a service that lets customers place calls from their personal computers to regular phones.

But the service will permit only outbound calls at first, even as rivals Yahoo Inc. and America Online Inc. allow instant messaging users to receive calls from conventional phones as well as to call out.

Microsoft, the world's largest software maker, and MCI, the telecommunications provider being acquired by Verizon Communications Inc., said they will begin a test run of the service in the United States this week. Broader availability is set for the first half of next year.

The service will use technology from Teleo Inc., a small startup Microsoft acquired in August. Teleo's Internet telephony software lets people make voice calls by clicking on phone numbers appearing on a Web pages.

It's the latest offering to use Voice over Internet Protocol, or VoIP, technology. Calls are broken into data packets that get routed over the Internet, an approach that is cheaper and more efficient than the traditional circuit-switched phone system.

Last week, Yahoo announced it would add computer-to-phone calling capabilities to its instant-messaging service, after a similar retooling of the rival AOL Instant Messenger service from Time Warner Inc. earlier this fall.

Microsoft and MCI's new service, which the companies have dubbed "MCI Web Calling for Windows Live Call," will allow users of MSN Messenger, Microsoft's instant messaging service, to call land lines or cell phones. Microsoft said it was working to add additional capabilities, including inbound calls.

Rates will start at 2.3 cents a minute during the test period. Pricing for the final version will be set when the service launches next year.

Customers will sign up for the computer-to-phone calling service through its new Windows Live Messenger software, which will eventually replace MSN Messenger, and buy prepaid calling time from MCI in $5, $10 and $25 blocks. MCI will handle account management, customer service and billing.

The companies did not disclose the value of what they called a "multi-year agreement," or specify how many years the deal will last.

The latest versions of MSN Messenger and other instant messaging programs already let people talk to each other from computer to computer.

There are also low-cost Internet phone providers like Skype Technologies SA, acquired by Internet auction house eBay Inc. in October, which give away software that lets people talk for free over the Internet using computers and microphones.