AOL to Give Instant-Messaging Users Free Phone Numbers

AOL is set to offer its instant-messaging users a free phone number to use for incoming calls, and for a fee, the ability to call regular phones from the software.

The move brings AOL Instant Messenger, or AIM, closer in functionality to voice-oriented applications like eBay Inc.'s (EBAY) Skype and so-called voice over Internet services from Vonage Holdings Corp. and others.

Skype last week reached 100 million registered users. AOL has 80 million registered users of AIM and ICQ, a similar program.

AIM began a decade ago as a text-based chat program and gradually added voice and video communication tools. But without the ability to connect to the regular telephone network, AIM users were largely limited to conducting voice chats with one another.

AOL, the Internet unit of Time Warner Inc. (TWX), will start offering the free numbers this month. It won't be possible to move existing phone numbers to the service.

AIM will alert users to incoming calls through display windows with ads on the user's computer screen. When the user is not online, calls will go to voicemail.

AOL said the extra phone number will be attractive to people who have concerns about revealing their home number or who want to keep commercial and social activities separate. It sees daters and job seekers as possible users.

For $14.95 a month, users will be able upgrade to Phoneline Unlimited, which gives free outbound calling from a computer to the United States, Canada, and 30 other countries.

The free incoming number and flat-rate outbound fee are unusual approaches: Most competitors charge a flat rate for an incoming number and per minute for outgoing calls.

Skype, for instance, charges $38 per year for a U.S. number, and around 2 cents per minute for outgoing calls.

However, Skype has had much more traction overseas than in the United States, where phone tariffs are generally lower.

John McKinley, AOL's president of digital services, said AIM Phoneline's fee model is a better match for the U.S. market.

AOL also expects to make money from coming premium features like custom ringtones and call forwarding.

The calling features will only be available on the Windows version of AIM. McKinley said the company was looking at expanding the service to Wi-Fi enabled handsets before porting it to AIM versions on other platforms, like Macintosh computers.

AOL also said it will introduce a beta, or trial version, of AIM Pages, which lets users create their own Web pages, with addresses based on their AIM user names. Users can keep track of updates to their friends' sites through AIM.

The concept is similar to MySpace and other social networking sites, another growth area in recent years. and are both owned and operated by News Corporation.