Will Yahoo deal undercut AT&T long distance?

AT&T and Yahoo have joined forces to provide Yahoo messenger with voice to AT&T Yahoo high-speed Internet subscribers. As a result, AT&T companies will be Yahoo's preferred network termination providers for the PC-based calling services globally. At first it may seem a broadband service feature. However, by comparing the rates--Yahoo's $2.99 a month for Phone In feature and AT&T's $29.95 a month CallVantage service--it seems that the deal will cannibalize AT&T's standard long-distance services. The real factor that could even out the math is how much AT&T is getting from Yahoo for call termination and switching services.

To learn more about the AT&T-Yahoo partnership:
- read AT&T's press release
- check out this ZDNet's blog entry