Skype launches free call promotion in US, Canada (Reuters)

SAN FRANCISCO (Reuters) - Skype, the Web telephone company,on Monday announced a marketing promotion that will allow itsusers in the United States and Canada to make free calls toconventional wireline and mobile phones.

Previously, users of Skype, a unit of online auctioneereBay Inc. (Nasdaq: - ), in both countries were required to pay forcalls from their PCs to traditional telephones.

Skype is seeking to accelerate usage in the North Americanmarket, where adoption of its voice-over-Internet technologyhas lagged other regions of the globe.

The promotional offer, which extends through the end of2006, covers calls within the United States and Canada. Callsfrom North America to conventional phones in other countrieswill incur charges. Skype already offers free calling to usersworldwide who call from computer to computer.

The company counts more than 100 million registered usersworldwide. It has reported peak usage of its services by up to6.5 million customers simultaneously.

The offer is likely to put price pressure on rivalvoice-over-Internet phone service Vonage Holdings Corp., whichis expected to go public later this month.

Although Vonage and Skype currently serve somewhatdifferent markets -- with Vonage acting as a full replacementservice for traditional phones over Internet lines, and Skypeconsidered by most as a complement to existing service -- thefree offer could siphon customers away from Vonage.

Henry Gomez, the general manager of Skype North America,said he believes the move would rapidly accelerate adoption ofthe service.

"Skype anticipates that completely free calling in the U.S.and Canada will expand Skype's increasing penetration in NorthAmerica and solidify Skype's position as the Internet's voicecommunication tool of choice," Skype said in a statement.

Shares of eBay were down 5 cents to $31.44 in middaytrading on Nasdaq.

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