Lycos Phone blows away Skype and Yahoo Messenger?

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Lycos Phone blows away Skype and Yahoo Messenger?

Lycos Phone is launching on Monday the Internet's first-ever "virtually" free VoIP integrated communications platform, combining IM, video chat, real-time video on demand streaming content (including IPTV channels), and an MP3 player. That first sentence certainly sounded marketing-speak didn't it? And I said the magic word "free", but "free" is never "free" or at least never totally free. So what's free about the new Lycos VoIP client and is there a catch? (there usually is)

Well, get this, you can make calls from their softphone client to ANY U.S. based PSTN number for free. Yep, that's right, you read that correctly. This makes Lycos Phone the first VoIP client that I am aware of offering free PSTN calls to U.S. numbers (unless you go back to Dialpad's early days when they briefly offered free U.S. calls with advertisements). When I talked with Brian Kalinowski, COO for Lycos, I had to confirm, "This isn't just free PC-to-PC calling? You're talking free PC-to-PSTN here?" He confirmed that calls made anywhere in the world using their software to any U.S. number would be free. Wow! This makes Yahoo's announcement last week that I covered pale in comparison.

In fact, I did a cost-comparison of Skype vs. the new Yahoo Messenger and Yahoo was slightly cheaper. However, with Lycos it's free. You don't get any cheaper than free - unless they start paying you to use the service. ;) The battle for VoIP is certainly heating up. Lycos is launching this product in partnership with, an India-based company which designed the software. Lycos has an exclusive 3-year deal with Globe7, so this application cannot appear on
any other portal like Google, AOL, MSN or Yahoo.

Ok, stop the presses. Let's backup here. I had the above written about Lycos offering free unlimited outbound PSTN dialing when Lycos emailed me days later to clarify, "It has come to our attention, that some of the journalists we've briefed have had some confusion over the pricing points for Lycos Phone. Just to clarify, regarding the pricing, with Lycos Phone, users can make free calls from PC to PC, free PC to video calls and receive unlimited free incoming calls from any landline or mobile phone from around the world. All users receive 100 free minutes of PC to landline and PC to mobile phone calls, and can earn additional free minutes through various promotional offers. Unlike Skype and Yahoo, Lycos Phone users also receive a free U.S. phone number. Additionally, unlike Skype and Yahoo, Lycos Phone offers free FAX and free voicemail to email."

The two key parts are bolded. While you do get unlimited free inbound calls you only get 100 free outbound minutes. So I will have to taper my enthusiasm a bit since it's not free unlimited outbound dialing. Still, 100 free minutes is pretty cool and the unlimited free inbound calls is unique to Lycos phone. I meant to ask Lycos if the 100 free minutes is a one-time offer or if it resets every month to give you 100 free outbound minutes each month or if you have to earn more credits. Their website states "Opt in to special offers and earn up to 2000 free minutes." So it appears they give you 100 minutes to start but you can add more credits by participating in offers. When I installed the Lycos Phone software I saw an offer from Earthlink High Speed Internet,, and a few university offers. I don't even see my free 100 minutes come to think of it. Will have to ask Lycos about that.

Lyocs offers you a free "Lycos In" number, which is also quite unique for a software-baed VoiP solution.. Lycos will let you pick a U.S. number for free. So take that Yahoo Messenger ($2.49/month) and take that Skype In ($3.16/month)! Basically, all you have to do to get started is download their software and immediately be able to make 100 free Outbound minutes to U.S. numbers and receive unlimited free inbound calls as well. This is perfect for teenagers that want their own phone line in their room and their parents won't shell out the dough to pay for it. Of course, there are many other market segments that will find the "free" phone number and free unlmiited inbound calls useful. This is certainly a whole new benchmark for VoIP set by the Lycos guys. Free to the extreme! I asked Brian who they were using for termination for the U.S. and he said they had a relationship with Verizon.

"Ok, so Lycos is giving some limited free outbound dialing and unlimited free inbound dialing, so what's the catch?" I thought you'd never ask. Well, there is an ad that displays on.. <interrupts> "Ads? Forget it. I don't need no stinkin' adware." Actually, it's not adware. The client simply displays advertisements and offers at the bottom of the client, similar to what MSN Messenger and other clients do. Also, if you take any of these offers you earn additional credits to make both domestic and international calls. Ironically, I saw a Vonage ad display at the bottom of Lycos Phone while I was testing it.

The Lycos Phone client can pull dynamic content from Lycos such as sports scores, multimedia content, and more. Lycos' goal is to make the client a "portal" with plenty of "stickiness" to keep users within the application so they view the advertisements and offers. It leverages XML, so users can add their own XML feeds (blogs, favorite sites, etc.)

Testing Lycos Phone on 65" TV from my couch. :D

A few caveats - I don't believe it uses the Global IP Sound (GIPS) VoiceEngine, though Brian couldn't confirm this fact. I'm going to call Globe7 to find out. Although the GIPS codec isn't the "end all be all", so I won't discount the voice quality on the Lycos Phone until I try it. Second caveat is it uses it's own proprietary IM database so it doesn't currently federate with other IM clients.<sigh> Why can't everyone just agree on SIMPLE or Jabber or something? Sheesh! But I can't knock Lycos Phone too harshly since Skype, the current "top dog" doessn't federate either. Another vaceat is that Lycos Phone currently doesn't have a user search feature (i.e. search by hobbies, location, etc.), which is a nice "community building" feature built into Skype and some other clients.

In addition, unlike Skype and Yahoo VoIP services, Lycos claims to be the first to introduce a VoIP system that brings full multimedia support for music and video on demand for both professional and independent content IPTV. The Lycos Phone platform provides free video on demand access to more than 300 movie trailers, business news, world sports and more. I tried out some of the IPTV channels and the quality was pretty impressive. You're going to start to see more convergence and media integration in all future releases of softphones from Google, Microsoft, Yahoo, and Skype. Or if they don't, they could be left in the dust. This could actually be Skype's achilles heel. Both Microsoft and Yahoo already have strong relationships with major media content providers, and certainly Google has enough clout & capital to build media content relationships, but I'm not so sure about Skype/eBay.

Also, I wouldn't be surprised if Apple launched a more powerful iChat program and leveraged iTunes and their other media content to have their own "killer VoIP/IM/MP3/video" client. This is the one case where "bloatware" won't be such a bad thing. In fact, if I can have a single client that can federate/connect to any other IM provider (i.e. GAIM) for a unified buddy list, supports SIP, MPEG2 video, IPTV support, call forwarding, CallerID, integration with my cellphone, MP3 streaming, and all the other usual suspects, I'd drop the 4 running IM/VoIP applications currently running on my PC in favor of one unified application.

In any event, getting back to Lycos Phone, unlike Skype and Yahoo, Lycos Phone also offers free fax and free voicemail to email. Users can also make free PC to PC video calls and again receive unlimited free incoming calls from any landline or mobile phone from around the world.

"This partnership with Globe7 allows Lycos to team with a best-of-breed global platform, leveraging Globe7's real-time communications infrastructure to provide other innovative services like Internet Protocol television," said Alfred Tolle, CEO of Lycos, Inc."We are in a very unique position to now provide this audio and video distribution platform to our millions of independent content creators throughout the Lycos Network."

"Globe7 was built from the ground up as a standards-based Voice-over-IP system with a wide array of voice call features such as voice mail, and integration with the existing U.S. and International telephone networks," Tolle added. "This, in combination with our upcoming Lycos HanMail system, based on Daum's highly successful HanMail product in Korea, will allow Lycos to leap-frog all existing communications offerings available today."

I'm sure Skype, Google, MSN Messenger, Yahoo Messenger, and several other players might disagree with that statement. But kudos to Lycos for offering some "free" inbound calling and a free PSTN number unlike their competitors. Let's see who is the first to follow suit.

Currently, Lycos Phone (Globe7) supports Windows 2000 and XP. Future enhancements will support Linux, Mac OS, Palm OS and Pocket PC.

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