VON: AOL announced VoIP launch

SAN JOSE--As expected, AOL Chairman and CEO Jon Miller announced today that his company will launch a mass-market voice over IP service next month, based on Level 3 Communications' national VoIP infrastructure and Sonus Networks softswitches.

In a rapidly delivered speech to the Voice on the Net audience in San Jose, Miller said the AOL Internet Phone Service will "leverage our existing strengths" by combining the presence aspects of AOL's Instant Messaging with voice service and by guaranteeing the quality and ease of use that mass market VoIP users will demand.

"We are still very much in the early adopter phase [of VoIP]," Miller said. "It is only about 4% of the residential market today."

That $100 billion residential telephone market is clearly the attraction, he admitted. "It's about the money," said Miller.

Unlike early adopters, mass market VoIP users want more than just deeply discounted phone service, he added. They want reliable, high-quality service from a trusted brand name.

AOL will build its VoIP service used the AIM Buddy List as the centerpiece of an online dashboard that will make it easier for customers to make or accept calls, knowing that the called party is present, and being able to identify who is calling. The company will also offer integrated messaging, combining voice mails and e-mails into the dashboard.

"This puts the power back in people's hands," he said. "And all options are done in an easy-to-use fashion."

"We think we are on the cusp," Miller said. "AOL plans to help the mass-market adoption of VoIP come fast and furious. I can feel the electricity in the air."

As some consolation to the VON crowd, many of whom are smaller companies chasing the same audience that AOL now threatens to swamp, Miller said AOL's entry in the market could help all VoIP players by taking the service mainstream.

And, he conceded, "We know there's a lot we don't know. There will be bumps in the road, but we plan to stick it out."