Lycos plans to launch a VoIP (voice over Internet Protocol) phone application, its first serious entry in the internet telephony market.

Lycos Phone, which will compete directly with similar offerings from Yahoo and eBay's Skype, is based on technology from Axill Europe, whose Globe7 application Lycos is licensing.

The companies have entered intro a three-year exclusive deal, during which Axill has agreed to not license Globe7 to any other major portal, including Yahoo, Google, MSN, and AOL.

With Lycos Phone, the company wants to replicate a "living room" experience for users, by letting them engage in other activities while they chat, such as watching television, listening to music, conducting instant messaging sessions and surfing the web, all within the phone application's interface.

Integrated features include streaming video IPTV, MP3 player, web browser, proprietary IM (instant messaging) network, and, later, the Lycos Mail Webmail service, he said. It is necessary to pack these features within the interface because the time users spend in their VoIP applications has been rising and will continue to do so, he said.

"We wanted to provide something that went beyond a standard IP dialler. Lycos Phone is not only a one-stop shop application for communications, but also for consumption of media content," he said.

All PC-to-PC calls are free. Rates for calls made from a PC to an outside line, be it to a mobile phone or landline, vary by country. Lycos has partnered with Verizon for the telecommunications component of the service.