Yahoo to battle Skype in bid to conquer VoIP market

Yahoo and Skype are on a collision course as the former announces a brand new version of its Yahoo messenger instant messaging client with voice capabilities, which runs specifically on Windows Vista.

The beta application uses Vista's own Windows Presentation Foundation graphics platform to turn on the "eye candiness".

Like Skype, Yahoo Messenger supports PC-to-Phone calls as well as send SMS messages as well as offering a new skin, multi-tabbing functionality and an updated graphics user interface.

Yahoo has already announced that it would be outsourcing Yahoo's premium voice service to newcomer Jajah.

Version 9 is available for download on Yahoo's website and, as for the previous versions, will be compatible with Microsoft Live Network.

Skype has also released a new version of its VoIP client; version 3.8 promises to reduce unwanted background noise and slash the percentage of dropped calls.

There have also been a number of video-related bugs that have been eliminated and the new Skype now integrates its own version of the Universal Plug-and-play network protocol.