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MySpace and Skype in free phone call deal

Nearly 110m global devotees of the internet's top social networking site, MySpace, will soon be able to make free telephone calls to each other through a deal with Skype. Under the tie-up, MySpace will embed the internet telecoms specialist's voice communications technology in its existing instant messaging function which allows members to chat to one another.

The arrangement could be crucial both to MySpace's parent company, News Corporation, and to Skype's owner, eBay - both under pressure to demonstrate they can make money out of huge online followings.

Ebay last night revealed a third-quarter loss of $936m after taking a $1.4bn charge to write down the value of Skype, which it bought for $2.6bn two years ago. Skype broke into profit this year, but has failed to live up to eBay's hopes of turning it into a major moneyspinner.

Skype offers free calls between its 246m subscribers, although it levies a fee for calls to landlines and mobile phones. It also makes money through premium services such as voicemail and call forwarding.

MySpace hailed the "groundbreaking" relationship with Skype. Its chief executive, Chris DeWolfe, said: "Our network has no geographical boundaries - internet calling is the natural next step for how our members communicate."

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