AOL Dials In to Net Telephony

AOL this week began selling TotalTalk, which is part of a recent wave of renewed interest in Internet telephony from AOL and its major competitors, Microsoft and Yahoo.

TotalTalk is a revamped version of a VOIP (voice over IP) service America Online Inc. first introduced five years ago.

It features three calling plans for a monthly fee ranging from $19 to $35, and about $50 in initial fees.

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Microsoft announced last month a deal with local phone giant Qwest to sell phone services to small and midsize businesses.

Yahoo Inc. recently unleashed a revamped version of its VOIP service, Yahoo Messenger with Voice, which provides new features and improves upon calling quality.

Microsoft Corp.s MSN, Yahoo and AOL, the three leading Internet portals, first introduced VOIP to the Internet-connected masses more than half a decade ago.

But up until a few months ago, the three portals allowed newcomers and VOIP specialists such as Vonage Holdings or Skype to run away with the market.

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The big threes recent moves signal that the pioneers of VOIP are now more serious about their voice business.

With customers reaching into the tens or hundreds of millions each already, analysts believe the big three portals pose a threat to leaders of the traditional phone industry.

But they differ on the severity of the impact; some believe its nominal, other industry watchers say it could be significant.

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