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Skype Stretches Its Legs on Verizon

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Unlikely partnership puts the VoIP service in a bigger spotlight.

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Months after it was turned loose from eBay (EBAY), Skype has forged a surprising partnership with Verizon (VZ) to offer free VoIP calls over the provider's voice network. Announcing the deal at the Mobile World Conference in Barcelona Tuesday, Skype plans to roll out its service on nine different Verizon devices next month -- including Android (GOOG) smartphones like the Motorola Droid (MOT) and several BlackBerry (RIMM) models.

Among the features offered will be free and unlimited calls between Skype members, cheaper international rates with Skype Out, instant messaging, and an "always on" capability -- allowing impromptu calls at any point without members having to plan to simultaneously run the program.

In a statement, Skype CEO Josh Silverman expressed the company's plan to make this new alliance the best platform for Skype to run. "Verizon Wireless will give US consumers the best Skype experience on mobile phones and will truly change the way people call their friends and family internationally," he said.

Whether it was intentional or not, Silverman was indirectly referring to the somewhat limited Skype experience iPhone (AAPL) users are currently left with. After the lengthy negotiations and prolonged delays to finally get the app into the iTunes Store, iPhone users are still confined to wi-fi connections to make a Skype call. The company recently said that 3G calls are almost ready to go, but no release date has been finalized.

Verizon, however, will bring the service onto its own voice network at launch -- yet there are some limitations to the deal.

A data plan is required for Skype to work, but that's in lieu of using any phone minutes. No video capabilities are yet available -- though with cameras predominately being placed on the rear of the phone, the logistics of video interaction would be a tad difficult. And conference calls, a seemingly easy feature to implement, will also not be available. Silverman voiced his intent to put video and conference calling into Verizon's Skype Mobile but again, there isn't a solid date.

Between the Skype-Verizon partnership, Vonage's (VG) app rollout in December, and Android's built-in support of Google Voice (albeit minutes-crunching), VoIP has never been as viable as it will be in 2010. Whether this leads to carriers lowering their rates to compensate for the rise of free over-the-web calls -- or the beginning of the steady disappearance of VoIP capability on mobile phones -- well, that remains to be seen.

But Verizon seems to be handling the public's support of VoIP quite well.
No positions in stocks mentioned.
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