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Internet phone company Vonage will name a new chief executive as early as next week, according to a story published in The Wall Street Journal Friday.

The newspaper cited people familiar with the situation. The news comes as Vonage secures funding to buy back some of its debt. On Thursday the company said it has a letter of commitment from the hedge fund Silver Point Finance to provide up to $215 million in private debt financing.

Vonage will use the cash, plus some of its own, to repurchase the remainder of its $253 million in convertible notes, the Journal story said. Vonage needed to raise money for the repurchase by December 16 or risk bankruptcy, according to the article.

Jeffrey Citron, who founded Vonage and stepped down as head of the company in early 2006, returned as interim CEO in April 2007. Over the past year, Citron has helped guide the company through a series of patent disputes and worries of bankruptcy.

Now that Vonage has settled its legal disputes and it's regained its financial footing, Citron is looking for someone else to take over the day-to-day management of the company, the story said.

But even with a new chief executive in charge, Vonage still faces many challenges. The company, which pioneered the Internet telephony market, faces stiff competition from cable operators now offering phone service as well as the phone companies themselves who sell cellular services that can also be used as wired phone replacements.

Ixia kicked off its "Switch to Ixia campain" by offering trade-in equipment and competitive financing solutions.

(Credit: Ixia)

Ixia, a leading company in IP performance testing, announced a competitive upgrade program today as part of its "Switch to Ixia" campaign.

The program will last through the end of September 2008. During this time, new and existing customers from all over the world can trade equipment from Ixia's competitors, including Spirent, Agilent, and Shenick, in for Ixia's latest test equipment and applications. Or they can earn up to a 50 percent credit toward a new purchase.

Ixia also offers IxFinancing Leasing, a special financing solution that allows you to pay for Ixia products, software, and services over time with no down-payment. You'll make small monthly payments, and a $1 end-of-lease buy-out.

Ixia has been known for many IP-based network testing solutions, from Aptixia IxLoad, which can generate layer 4-7 traffic for content-aware device assessment, to ixChariot, which CNET uses to test wireless routers.

Internet calling provider Skype said Tuesday that it has hired Scott Durchslag, a former Motorola executive, to become its chief operating officer.

Durchslag spent more than five years at Motorola where he was most recently corporate vice president of global product and experience invention for the mobile devices business unit. Skype said that while in that position Durchslag "led product strategy, innovation, intellectual property, design, user interfaces, consumer experiences, partnerships, product marketing, and customer care."

The fact that Durchslag was in charge of "strategy" and "innovation" for Motorola's device business at a time when the company lost significant market share to competitors, because it lacked innovative and compelling handsets, isn't exactly a ringing endorsement. Motorola's poor handset performance led to the ouster of former CEO Ed Zander and a planned spinoff of the mobile device unit.

That said, Durchslag had some significant successes at Motorola. He helped strike deals with Google, Microsoft, Yahoo, and Kodak to bring new services to Motorola's mobile devices. And in a previous role at the company, he was in charge of Motorola's South Asia region where he was able to build a business with the highest margins for Motorola, according to the Skype press release.

When he joined Motorola in 2002 as chief strategy officer of the Personal Communications Sector, he helped develop the turnaround strategy that doubled market share and revenue for that part of the business between 2002 and 2007, Skype also said in a statement.

Josh Silverman, who was named Skype's president in March and will be Durchslag's new boss, is confident that his new charge will help Skype innovate and bring new services to market.

"Scott has an outstanding track record and will be able to help us apply best practices in staying ever more customer-focused and nimble, even while becoming larger," he said in a statement.

Skype provides free and low-cost voice, video calling, and instant-messaging services over the Internet. The company was acquired by eBay in 2005 for $2.6 billion. And even though it is by far the most successful voice over IP services company in terms of users with 309 million registered users worldwide, it hasn't been a financial success for eBay. In fact, last year, eBay took a $900 million so-called impairment write-down against the value of Skype. In essence, the company admitted to shareholders that it has taken a loss on its original investment.

Still, eBay is determined to make something of its investment. Mobile is likely the next frontier for Skype. And Durchslag's experience could help the company come up with a viable strategy. I guess we'll have to wait and see.

T-Mobile USA plans to announce Wednesday that its new @Home voice service will be available nationwide starting July 2.

The cell phone operator has been testing the new Internet telephony service since February in Dallas and Seattle. And now the new service, which is meant to replace traditional home phones, will be offered to any T-Mobile cell phone customer.

Subscribers will be able to connect any regular home telephone to a T-Mobile router that will send calls over the Internet much the same way as services like Vonage operate. The service costs $10 a month plus taxes and fees for unlimited domestic local and long-distance calls.

Only T-Mobile wireless customers who subscribe to at least a $39.99 individual calling plan or families subscribing to at least the $49.99 monthly T-Mobile calling plan can get the service. The @Home service also requires that users subscribe to a separate broadband service from a cable operator or telecom provider. And they are required to use a special T-Mobile router, which also provides Wi-Fi Internet access throughout the home.

This router can also be used to provide T-Mobile's HotSpot @Home phone service. This service, launched last year, allows T-Mobile subscribers to use dual-mode cellular and Wi-Fi phones that switch between both networks. When subscribers are near their home Wi-Fi hot spot, they use the broadband network to make unlimited domestic calls. And when they are outside the home, the phone seamlessly switches to T-Mobile's cellular network.

The service, which also costs $10 extra per month, serves two purposes. It helps provide better in-home cell phone coverage and also helps reduce the number of minutes used on the T-Mobile cellular network.

Britt Wehrman, director of product development for T-Mobile says the service, which launched a little over a year ago, has been a big success. The company hasn't disclosed subscriber numbers for the service, but Wehrman said that 45 percent of the hot-spot customers are leaving competitors to get the T-Mobile service. T-Mobile currently has eight dual-mode handsets that work with the service, two of which were announced earlier this week. And it has four more to announce by the end of the year, bringing the total to 12 dual-mode handsets.

The @Home VoIP (voice over Internet Protocol) service is meant to work with the hot-spot phone service, Wehrman said. When the hot-spot service was first introduced, the company found that families were interested in the plan. But they weren't willing to cut the cord on their home phones.

"The hot-spot service offers parents a good way to limit overage charges, because the kids can talk on their cell phones while they're at home without eating up minutes," he said. "But we found that many families didn't want to get rid of their traditional phones. They still wanted one phone in the house for the whole family."

So the @Home VoIP service was created to give families who don't want to get rid of their traditional landlines a low-cost option for retaining that line while still using the hot-spot service. To ensure that E911 service works with the VoIP service, T-Mobile is requiring all users to register their home address before service can be activated.

But because it is an Internet-based phone service that is dependent upon a broadband modem for connectivity, families will still have to consider the risks of power outages and Internet interruptions that will make the VoIP service and E911 unavailable during those outages. But Wehrman said that the fact that T-Mobile requires that subscribers of the @Home service also have a T-Mobile cell phone subscription limits the safety concerns.

It's been a while since a major Skype release, and on Wednesday, the eBay-owned VoIP communication service will issue the first of several planned version 4.0 beta builds for Windows that are anticipated to drop over the next few months.

The biggest changes to come with Skype 4.0 beta (download) are visual and organizational. For the first time, the program contains complete prompts for running sound and Webcam checks within the program set-up. After two failed tests buffered by common troubleshooting suggestions, Skype will recommend hardware--like headsets and a Webcam--to reverse incompatibility errors.

(Credit: Skype)

Redesigned interface
Skype 4.0 beta's redesigned interface may also get you blinking. Compared with its stable cousin, the new Skype beta's GUI has overflowed its banks, replacing tabs in the once-narrow interface with a second pane tacked on to the right. Four or five functions are flattened into this single window in an effort to make communications other than the voice chat staple easier to find and use. To wit, there's an IM bar deposited at the bottom of the communications pane and large buttons that prompt voice and video calls. Video calls are large by default, filling the program's communication activity pane.

Skype Out, the service offering competitive international rates for Skype users calling contacts' landlines instead of their computers, has also been chiseled out, by a large call-to-action button on the navigation bar. The button just below it opens a directory for finding people, businesses, and chat rooms. The toggle bar tucked away at the top switches from saved chat conversations to the contacts view, and rounds out the new additions.

Some functionality, like Skype Prime, will arrive in later builds.

(Credit: CNET Networks)

Still more to come
Though there may be a placeholder for it, not every function in this first beta is live. The shop for Skype-approved hardware, while available from Skype.com, will not be activated in this iteration, nor will be the service on real-time advice, called Skype Prime. Automatic redial, call transferring, video presentations, and integration with Outlook contacts are also scheduled for roll-out in later builds.

The spread-out interface of Skype 4.0 beta for Windows will definitely take some getting used to, especially as it abandons the client's traditionally nimble, IM-styled build. However, it does succeed in calling out a wider array of communication services. This may give the Luxembourg-headquartered company a chance to deemphasize VoIP as its core competency and mark out new territory in Internet video, collaboration tools, and entertainment services.

As ambitious as Skype's new look and capabilities are, Mike Bartlett, the program's Windows product manager, confessed during our briefing that this design and the newly introduced features will be closely monitored for user backlash. It's likely that strong feedback from Skype's 309 million registered users will leave an impression on Skype 4.0 beta continues to take shape in the upcoming months.

Internet telephony company Vonage is getting back on track with improved quarterly earnings and a deal, announced Thursday, to resell broadband service from Covad, a DSL service provider.

The new service, called Vonage Broadband, will offer speeds of 3 megabits per second to 6 Mbps to residential and small-business customers. It will allow Vonage to bundle its Internet telephony services with broadband services. Until now, customers using Vonage would get their own broadband service from a cable company or phone company and then add the Vonage service on top.

The news of the deal comes as Vonage announces first-quarter 2008 earnings. The company, which has been struggling to reduce its losses, said it lost $9 million. This was a huge improvement from the year before, when the company lost $72 million during the same quarter.

Revenue for the quarter was $225 million, up about 15 percent from the previous year.

A year ago, Vonage looked to be dying a slow death. It was still battling Verizon Communications in a lengthy and expensive patent infringement lawsuit. And its losses were mounting as customers dumped its service. But now it looks like the company has begun turning things around.

Of course, it isn't out of the woods yet. With a greatly reduced marketing budget, it is still having trouble attracting new customers. And it continues to lose a lot of customers every month.

For the first quarter, it added a total of 30,000 new subscribers, down from 56,000 new subscribers in the previous quarter and 166,000 during the first quarter of 2007. And it's still losing customers. The monthly churn rate, or cancellation of its service, rose to 3.3 percent from 3 percent during the previous quarter.

That said, Vonage seems more focused on surviving. And with its legal troubles out of the way, the company looks like it's refocusing its strategy. CEO Jeffrey Citron said the company will likely increase marketing spending in the latter part of the year, which should spur more customer growth.

AOL said Tuesday it has opened the interface to AIM Call Out, a move that will let programmers more easily build products that tap into the service for making calls over the Internet to mobile or landline phones

The Open Voice API (application programming interface) is freely available. Building it into a device, such as a phone with Internet access or with support for SIP (Session Initiation Protocol), can let people call using AOL's network and bypass much of the ordinary telephone infrastructure.

AOL charges fees for using the Call Out service, but the rates are compelling, the company argues. Calling within the United States costs 1.7 cents per minute; calling Beijing costs 1.5 cents per minute; and calling a mobile phone in the U.K. costs 20 to 25 cents per minute.

"Our offering and our rates are competitive with traditional landline and mobile carriers, as well as other VoIP carriers in the space," Brent Newsome, director of AOL's voice services, said in a statement.

The move is part of the Time Warner division's effort to expand its free AOL Instant Messaging network into revenue-generating areas. AOL has 62 million active AIM users, the company said.

It's not the only company making the move from IM to voice over Internet Protocol. Yahoo Instant Messenger, a top rival, said Tuesday it's moving off its in-house phone connection technology to that of start-up Jajah in the third quarter.

Has eBay about had it with Skype?

New eBay CEO John Donahoe told the Financial Times the online auctioneer will consider selling Skype if it can't find a way to make the service better help eBay's e-commerce business.

"What we're testing this year are the synergies," Donahoe told the Financial Times. "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it."

Donahoe did say Skype is doing well. It generated $126 million in the first quarter, up 61 percent from a year ago. This year, it's expected to generate $500 million in revenue and be profitable. Overall, first-quarter eBay revenues reported Wednesday were up 24 percent from a year ago to $2.19 billion. Profit was $460 million, up 22 percent from the same quarter a year ago.

But the question about Skype, which eBay acquired for $2.5 billion in 2005, has never been whether it's a decent business, it's whether it's a good fit for eBay. By the end of the year, the company will finally be closer to that answer.

The sagging phone business has caused Qwest Communications International to offer hundreds of employees a voluntary buyout as the company continues to tighten its belt.

On Tuesday, Qwest, the third-largest phone company in the U.S., said that it would cut "less than 2 percent" of its 36,843 workforce through a voluntary program. The cuts are targeted at roughly 700 technicians and other Qwest employees who work for the company's traditional landline business, according to the Associated Press.

The cuts come as Qwest and other local phone companies are seeing thousands of customers abandon their old landlines for alternatives, like cell phones and voice over IP services from their cable operators.

Qwest provides local phone service in 14 states, mostly out West. The company has about 12.78 million landlines, a number that dropped 7.3 percent last year from the total in 2006, the AP reported.

The phone company negotiated the buyouts, which are expected to be completed by the end of the month, with the Communication Workers of America union. Qwest had been reducing its workforce through natural attrition, but the voluntary program was put into place to give some employees the option to retire early, which will speed up some departures.

Qwest hasn't said how much the job cuts will cost or how much they will save the company down the road.