Yahoo to Begin Charging for Telephone Service

Yahoo Inc. is offering upgraded software for its instant-messaging program that includes a fee-based telephone service, as the biggest Internet-search Web site seeks to reduce its reliance on advertising.

The instant-messaging program, which lets users e-mail each other in real time, is free. Yahoo now will charge for its phone service, which had been free in the U.S. The service lets users place calls from their personal computers to regular phones.

Yahoo is seeking to increase revenue from sources other than advertising, which tumbled since some dot-com customers went out of business or reduced spending.

Instant messaging is the fastest-growing Internet application, said Lisa Pollock, director of Yahoo messaging products.

The Santa Clara, Calif.-based company wouldn’t say how many people use its instant-messaging software. Yahoo is working with Internet-telecommunications company Net2Phone Inc. on the phone service, which charges 2 cents per minute for calls within the U.S. International rates vary.

Other Internet companies such as AOL Time Warner Inc., the largest Internet and media company, also offer free instant-messaging programs.

Yahoo shares fell 70 cents Friday to $20.13 on Nasdaq.