On Wednesday, the company is debuting a new Android and iOS app, Vonage Mobile, that allows for free calling and messaging within the company’s network. International calling off of the network can be done for a price that the company says is far less than that charged by cellular carriers, and below that charged by Skype.

Like some of the start-ups, but unlike Skype, Vonage Mobile works with a user’s existing address book and phone number. And Vonage says its HD audio quality and brand should help it compete against the smaller rivals.

“We think there is a very large marketplace, and while it is fragmented right now, three to four years later, there will be a couple of winners,” Vonage CEO Marc Lefar told AllThingsD.

Last year, Vonage debuted several apps, although mobile has yet to become a big part of the company’s business.

“In the larger scale of a $900 million business, it is still a small part of our revenue stream,” Lefar said.

The new program, which incorporates some features of the older apps, allows users to call and text those with the app (and invite others to join). To call people outside the Vonage network, users can buy credits directly from the Android Market and iTunes App Store.

As an added enticement, the company is also offering free calling to numbers in the U.S. and Canada. Eventually, Lefar said, the company expects to charge about a penny a minute for such calls.

Perhaps more interesting is a feature that is still in development that would let one receive calls on their main number while traveling internationally without incurring steep roaming charges.

“We think we’ve cracked the code on that,” Lefar said.

Republic’s thesis is that with Wi-Fi networks so plentiful, most people only occasionally need cellular networks, and can do most of their calling, texting and surfing over Wi-Fi. The carrier’s initial service plan promised unlimited calling and data use, but said that it was encouraging customers to use Wi-Fi for most of their needs and that those who exceeded certain usage could find themselves looking elsewhere for service.

Republic still wants its users to rely on Wi-Fi, but it is no longer threatening to cut them off if they use cellular networks too much.

“From today, republic wireless is all-in,” the company said in a blog post last week. “We’re eliminating all usage thresholds, and with them the concern some of you have expressed about losing your membership for maintaining too large a cellular footprint.”

Even with the move, Republic Wireless still probably isn’t for everyone. It offers a single basic Android phone, and users must pay for that phone upfront. The phone uses custom software on top of Android to route things over Wi-Fi whenever possible, and uses Sprint’s 3G network when cellular service is needed.

Republic also notes that the service remains in beta, promising that the service will remain unlimited during the beta phase.

“Everyone who has purchased or purchases a phone during beta will be guaranteed the opportunity to enjoy unlimited service, without fear of cancellation, until the end of beta,” Republic said. “We won’t end beta until we either achieve economic sustainability or become convinced that doing so is impossible. In the event that we end beta with a decision to abandon or change our unlimited offering, we’ll give you the option of canceling for a full refund for your device at that time.”

Republic will keep — at least for now — a tool that shows users how much of their data and voice use is on Wi-Fi versus cellular, relative to how others are using their devices. It also plans to keep a clause that could remove users for “unacceptable use” beyond what is appropriate for a personal smartphone, though it says it may revise its language on that term, as well.

With the closing of the deal, which was announced back in May, Skype will become a new business unit within Microsoft, with Skype CEO Tony Bates becoming the president of the newly created Skype division. Over time, Microsoft said, it will integrate Skype into a variety of its products.

“By bringing together the best of Microsoft and the best of Skype, we are committed to empowering consumers and businesses around the globe to connect in new ways,” Bates said in a statement. “Together, we will be able to accelerate Skype’s goal to reach 1 billion users daily.”

It’s the latest big acquisition for Skype, which was first acquired by eBay for $2.6 billion back in 2005. The online auction company sold off most of the company to private equity owners for $1.9 billion in 2009. Then, in May, Microsoft came along with its bid, nabbing Skype before a planned IPO.

Although the deal has received required regulatory approval in most markets, Microsoft noted that the deal has not yet been approved in certain markets.

“The acquisition remains under review in a few countries, and will be completed in those countries when such reviews are closed,” Microsoft said.

Of course, the big question now is what Microsoft is able to do with its big buy.

T-Mobile notes that 20 percent of calling is currently done using IP telephony; that figure is expected to reach 40 percent over the next three years.

“We want to embrace the opportunity to get our fair share of that market,” T-Mobile Senior VP Brad Duea told AllThingsD. It doesn’t hurt that T-Mobile has the smallest share among major U.S. cellular carriers, or that it doesn’t have its own landline phone business, as do Sprint, AT&T and Verizon. “We don’t have a legacy landline business to protect,” Duea said.

T-Mobile launched the Bobsled service earlier this year, initially focused on calling between Facebook friends. The company had a little trouble getting off the ground, as Facebook took issue with the way T-Mobile was marketing it. It was eventually relaunched in May.

With the latest expansion, the service now allows calling via mobile devices as well as through Mac and PC Web browsers. Calls are free not only to other PCs but also from any device to any phone number in the U.S., Canada and Puerto Rico, Duea said. T-Mobile also has a group and text messaging component to Bobsled, which is currently available on three T-Mobile Android devices, and is coming soon to any Android or iOS device.

“With IP (telephony), we can extend our reach beyond our market, literally into other countries,” Duea said. T-Mobile isn’t the only carrier that sees such calling services — dubbed “over-the-top” services — as a way to expand their markets to new geographies. France Telecom’s Orange, for example, has an app called ON Voicefeed that aims to get into VoIP calling by providing a custom voicemail service.

T-Mobile is particularly interested in offering calling to young iPod touch owners, who might then be interested in T-mobile service when they get their first phone. (Of course, T-Mobile also hopes to be acquired by AT&T before that happens.) The company plans to eventually issue Bobsled customers their own phone numbers, so they can receive calls from any phone.

Time to Call is an iPhone app that allows users to make 15-minute calls to any of 100 countries for just a buck or two. Another 90 countries can be dialed for up to 15 minutes for under $10. The service is done on a pay-per-call basis with the money deducted from a user’s iTunes account as an in-app purchase.

“It will be the absolute easiest way to buy and make international calls,” Vonage CEO Marc Lefar told AllThingsD. The app works worldwide over Wi-Fi and in the U.S. and Canada over 3G (though data charges may apply for those on tiered plans).

Although perhaps less simple than just using the iPhone’s built-in phone app, savings using Time to Call can be significant, Vonage says. The company says a 15-minute call from the U.S. to Mexico costs $2, as compared to nearly $10 on a typical wireless carrier. When traveling overseas, the savings can be even greater for those who have Wi-Fi access. The company notes that a 15-minute call from Japan to South Korea using Time to Call is just 99 cents as compared to more than $34 when made via a traditional wireless call.

Lefar notes that three in five international calls are still made directly through a wireless or wireline carrier, typically at rates three or four times higher than is necessary.

Of course, Vonage is not just competing with direct-dial calling but also a host of VoIP companies, including Skype, that have been faster to move to the mobile phone.

“Skype, the biggest name that is also in this space, came at it from a PC-to-PC space,” he said. “We’re meeting in the middle at mobile. That’s where the battle will be fought over the next couple of years.”

Vonage plans to launch Time To Call in more than 80 countries simultaneously in the iTunes App Store, part of the company’s effort to expand into regions beyond the United States. Those who download the app will be able to try the service for free, with one free call to any of the 100 countries where 15-minute calls are priced at either 99 cents or $1.99. That, Lefar notes, is the same as the cost of other impulse buys, like a song or TV show.

Lefar said that if the shift to mobile is a marathon, he thinks the industry is only at the quarter-mile mark.

Just last week Vonage introduced another mobile product. That one, dubbed Vonage Extensions, is designed to allow the company’s home-calling customers to make free calls using their mobile phones.

“It’s an extremely important part of our strategy,” Lefar said of the mobile efforts. Vonage, he said, was near bankruptcy back in 2008 and had to refinance its debt in the middle of the financial crisis. Since then, he said, Vonage has managed to turn itself around as a profitable company with substantial cash flow.

“The focus now for the organization is really on growth,” he said.

Just how well Vonage is doing on that front should become clearer later on Wednesday, when the company reports quarterly earnings.

The company announced Vonage Extensions, which allows people to make Vonage calls over their mobile phones, including international calls. The service is free, but only works if you are using Vonage for home phone calls.

“Now new and existing customers can call these unlimited countries on their mobile phones for no additional cost,” Vonage CEO Marc Lefar said in a statement. “This new service dramatically increases the value of Vonage’s core offering, providing customers with more flexibility and savings when making international calls.”

Customers can add any phone number as an “extension” to their Vonage account, and dial an access number and the number they wish to call, much like a calling card. The service works with any mobile phone, but the company also plans to introduce iPhone and Android apps over the coming weeks, which will simplify the process so users can simply dial a number from their contact list without having to enter so many numbers.

With the move, Vonage will also find itself up against a range of competitors, including familiar foes like Skype as well as new mobile-focused competitors such as Viber.

It’s not the first foray into mobile for Vonage. The company released an iPhone app back in 2009, though it only allowed calls over Wi-Fi.

The new “Twilio Client” costs $.0025 per minute whether calls are VoIP to phone, phone to VoIP, or VoIP to VoIP. It is available for Web, iOS and Android.

Twilio CEO Jeff Lawson said he has a clear target in mind.

“Skype has a long history of not being a developer-friendly app, and that’s where we’ve made our name,” he said. “We’re trying to enable this burst of innovation in telecommunication.”

San Francisco-based Twilio counts more than 40,000 developers using its tools. It’s backed with approximately $16 million in funding from investors such as Bessemer Venture Partners, Union Square Ventures and 500 Startups.

“This predominantly affects people using Skype for Windows,” Skype said on its Web site. “We have identified the problem and will issue a fix in the next few hours.”

In the meantime, it offered steps that Linux, Mac and Windows users can take to sign in if they encounter problems.

Skype, which is in the process of being acquired by Microsoft for some $8.5 billion, has had periodic issues, including a major outage last December.

UPDATE: In a blog post, Skype suggested that Windows users update to the latest version. A Mac for Skype update should be available tomorrow.

If you look at Skype’s most recent IPO filings, you see several references to plans to grow its enterprise business. In March, Skype and Citrix announced a deal to integrate Skype into GoToMeeting.

It also has a Skype Enterprise product that’s aimed at small and medium businesses, and lots of people I know, most of them in smaller companies, use it for work. Skype has been discussing the enterprise opportunity for some time. In its IPO filing it says it conducted a survey of 40,000 users who told them that more than a third used Skype occasionally or often for work-related purposes.

The problem is the perception that Skype isn’t stable enough to meet the must-work requirements of the enterprise. The outage that occurred around Christmas last year and others like it would tend to discourage CIOs from deploying Skype in any meaningful way.

One thing that Microsoft brings to the table in this combination is the smarts to fix what’s wrong with Skype, and then convince CIOs that it’s stable enough to use. Some of the fundamental weaknesses in Skype’s peer-to-peer infrastructure could potentially be fortified with some help from Microsoft’s cloud service Azure.

Plus? Look at all the different places where Skype could conceivably be integrated: Microsoft Outlook, Microsoft Office, Office 365. Add in compatibility with Microsoft Lync and improvements across the board on all the other desktop and mobile versions of MS products and Skype could be one of those tools that crosses the chasm between work life and personal life. If you buy the persistent arguments about the “consumerization of IT”–that is, the trend that employees expect to use at the office what they use at home–it could mean gold.

According to T-Mobile, the service was voluntarily pulled amid concerns that the service doesn’t make clear it is not from Facebook itself.

“We are voluntarily and temporarily suspending the Bobsled service as we work with our partners at Facebook to address their design questions, including working to ensure that the Bobsled experience is clearly differentiated and is not mistaken for a Facebook created property,” T-Mobile said on a Facebook page for the service. “We apologize to our customers for this temporary disruption in service.”

A company representative was not immediately available for further comment.

T-Mobile launched the service last week, saying that it hopes to expand the brand in the coming months to include video chat as well as calls to mobile and landline numbers.

Today the company is announcing Bobsled, a free Facebook application that lets users make PC calls to their social network friends. And people don’t need to be T-Mobile cell phone customers to download or use Bobsled, which integrates with Facebook’s chat application.

“T-Mobile’s focus is to innovate to provide simple and affordable communications for customers, enabling people to stay connected wherever they are,” Senior VP Brad Duea said in a statement. “Bobsled by T-Mobile takes our communications services innovation to a whole new dimension, bringing simple and cost-effective connections to more than half a billion people overnight, allowing people on Facebook to more easily connect and giving voice to social networking.”

The initial release of Bobsled lets users call their Facebook friends as well as post voice messages on the walls of their buddies.

T-Mobile promised more to come, including video chat as well as calls to mobile and landline numbers. “Our new Bobsled brand will evolve in the coming months to provide even more ways for people to connect, no matter what platform, device or mobile provider they are using,” Duea said.

It will be interesting to see what AT&T does with Bobsled when and if its deal to buy T-Mobile USA goes through.

In its traditional business, T-Mobile USA plans on Wednesday to start selling the Sidekick 4G, G2x phone and G-Slate tablet.

Rebtel, which offers free and discount calling on a number of mobile devices, also offered up some financial numbers, saying it is profitable and 2010 revenue was $40 million, up 120 percent from a year earlier. The company said it expects 2011 revenue to reach $75 million.

The first improvement is in the subscriber numbers. Skype says it has 663 million subscribers, an improvement of more than 100 million from the original filing. It serves 145 million of those subscribers at least once a month–21 million more than in the August filing, and it has 8.8 million paid subscribers, up from 8.1 million previously. Skype users made 207 billion minutes of voice and video calls during 2010, and in the fourth quarter, video calls accounted for approximately 42 percent of all Skype-to-Skype minutes. Users sent more than 176 million text messages via Skype.

Revenues grew to $860 million for the year ended Dec. 31, up from $719 million in 2009 (combining the 2009 results of Skype pre-spinoff from eBay and post-spinoff). Operating profit for the year was just shy of $21 million, a significant turnaround from a $364 million combined operating loss the year before. The net loss was $6.9 million.

One new revenue source that’s coming: Advertising. “We have also enhanced the functionality on our Skype 5.1 client for Windows and Skype 5.0 client for Mac to enable them to feature display advertising,” the filing says. But there’s the classic problem of injecting advertising where there was none before: Users tend not to like it very much. Skype acknowledges as much elsewhere in the filing discussing risks: “Finally, our users may respond negatively to receiving advertisements through their Skype software client, which could negatively and materially affect user engagement, our Skype brand and our results of operations.”

Skype Chief marketing officer Doug Bewsher discusses the onset of ads in a blog posting here. He says initially, Skype will be starting slow. Ads will be targeted only in the U.S., the U.K. and Germany at first. “You may only see ads occasionally,” he writes. “Our initial plan is to show an ad from one brand per day in each of the markets where advertising is being sold.” The ads will start appearing in the Home Tab this week.

The filing also contains some disclosures on the system failure that hit Skype late last year, though no new color on exactly what happened. A software error in the Skype client for Windows caused 40 percent of users online at that time to fail, resulting in a loss of somewhere from 25 to 30 percent of the network’s super nodes. The increased demand load on the super nodes that remained online was too much and shortly the whole network went down. Skype admits that negative publicity might hurt its ability to introduce a product aimed at businesses: “As we increasingly introduce products particularly targeted at enterprise customers, for whom system stability is a critical factor, any system failures could have a significant impact on our ability to attract or maintain our relationships with enterprise customers.”

For one thing, once I gave out my new number to a handful of friends, I had this one goofy friend for whom I recorded a custom greeting. Every time he would call, I’d let it go to voicemail and he’d start every message laughing at some silly in-joke I’d leave for him in the greeting. Okay, I grant you not many people would go to the trouble to do that, but if you knew this guy, you just might. Update: A few readers pointed out in the comments that this feature is re-enabled in Google Voice, and they’re correct though it’s not exactly easy to find.

Ever since GrandCentral became Google Voice, it’s been a lot less fun to use. That custom-greeting feature is gone, as are some of the funnier Web calling buttons that GrandCentral had offered. Maybe that’s one of the reasons behind today’s acquisition by Google of SayNow.

Details are scant about what Google has in mind, but a source close to the deal tells us that the intent on Google’s part is to make Google Voice “even better in a world of Skype and Facetime,” which implies that the next step for Google Voice is some form of video calling.

SayNow made a name for itself by giving celebrities like Miley Cyrus, the Jonas Brothers (remember them?) and the cast of “Glee” a phone number for fans to call and hear the occasional message. And at the start of the football season, ESPN used it to send the message embedded below from former Chicago Bears coach Mike Ditka to some 1.6 million fans on Facebook. Another feature gave celebs a way to hold live conference calls that fans could dial in and listen to. The biggest SayNow client was the rapper Soulja Boy, who racked up 50 million calls totaling some 100 million minutes of call time. If nothing else, Google can learn from the team at SayNow how to promote the service and get people interested in using it.

SayNow also has a serious side, an enterprise application called Big Call, aimed at making conference calls for businesses easy. The company says it was built by an intern in a week.

The deal for SayNow comes on the same day that Google made its long-awaited number-porting feature official, suggesting that Google Voice is going to be the focus of a lot more time and attention in the coming months.

Ditka’s season-opening greeting for Facebook users is below.

“We are committed to bringing innovation into the oligopolistic marketplace to make international calls either free or super-cheap for our customers,” Rebtel CEO Andreas Bernstrom said in a statement. Rebtel’s app automatically notices when an international call is being made and routes the call over its VoIP service, as opposed to making a cellphone call.

CIO Lars Rabbe says in a blog post that a set of support servers responsible for Skype instant messaging became overloaded, and as a result sent delayed responses. A bug in the latest Windows version of the Skype desktop software failed to process these delayed responses, causing them to crash. About half of the world’s Skype users who were signed on at the time the problem began were using that version of the software, and of those, about 40 percent crashed. Among them were users whose machines were serving as supernodes. Rabbe says as many as 30 percent of the Skype network’s supernodes were among the crashed machines.

Losing those supernodes increased the load on other still-functioning supernodes, which was compounded by all the crashed Windows users trying to restart their software and get back on the network. He says traffic to these supernodes surged to 100 times normal volume for that time of day.

What he doesn’t go into great detail about was why the instant messaging servers became overloaded in the first place. Was this another bug in the server software? It’s a little unclear from this explanation.

Rabbe says Skype is trying to learn from the incident and has instituted new procedures to try to prevent this sort of thing from happening again. But this can’t help but hurt its reputation as it looks for ways to diversify its base beyond the millions of free users it has and make some actual money.

The whole reason Skype is supposed to work as well as it usually does is the strength and resilience of the network, and the fact that the network gets stronger as more people are signed on to it. To say that two bugs in a strange confluence of events could bring that entire network down raises a lot of fundamental questions about Skype.

Rabbe says an investment program to increase capacity to support paid consumers and enterprise customers is underway and will continue into 2011. I’m betting Skype will speed it up.

Also still outstanding from CEO Tony Bates and his team is a full explanation about what caused Skype to fail for the better part of two days. He promises that will be coming early next week.

Offline instant messages and group video chat services remain offline, he said.

Bates said Skype now knows what caused the crash, but he didn’t disclose it. He ruled out the possibility of some kind of malicious attack, and said it’s conducting a detailed postmortem.

This would probably be the worst time for Skype to experience a high-profile outage. Though the Skype service is working today, lots of people who might have used it to call family members heading into Christmas may have made alternate plans.

However, the failure, whatever its cause, is also a reminder that Skype isn’t always in charge of its own ability to stay online. In 2007 an otherwise routine Windows security update issued by Microsoft forced an abnormally high number of PCs running Skype around the world to restart at roughly the same time. A software flaw prevented the Skype peer-to-peer network from compensating properly and the service crashed for two days.

This incident will also hurt its reputation with two key constituencies: Prospective business customers and potential investors. Business customers will rethink plans to deploy Skype. And potential investors will question whether this company has its act together, hurting the potential benefit from its forthcoming IPO.

To its credit, Skype did manage to restore service much faster than it did in 2007, as SkypeJournal notes here.

System failure is one of the risks that Skype admits to in its S-1 filing with the U.S. Securities and Exchange Commission. Of the 2007 failure, Skype says in its filing:

“We experienced significant adverse publicity and lost net revenues as a result of this outage, and any similar outage in the future would likely harm our business. As we increasingly introduce products particularly targeted at business customers, any system failures could have a significant impact on our ability to attract or maintain our relationships with business customers.”

Bates’s video message to customers is below.

Announced moments ago, the two-phase deal will see Avaya customers first given access to Skype Connect, the company’s play at the IP-enabled PBX and Unified Communications (UC) market. Later, by the second half of 2011, the two companies will further integrate their communications platforms so that Avaya and Skype users can interact with one one another via presence, instant messaging, voice and video.

The deal will give Skype more access to the enterprise market through the sales and distributions channels of Avaya, and Skype says the integrated product will address corporate concerns about security and communication management. For Avaya, having Skype and its hundreds of millions of users is a nice way to differentiate itself from rival Cisco (CSCO).

Acting as middleman in the deal–private equity group Silver Lake Partners, which bought Avaya in 2007 for $8.2 billion and later bought a majority stake in Skype from eBay (EBAY) for $1.9 billion.

Avaya and Skype Sign Strategic Agreement for Business Communications and Collaboration Solutions

BASKING RIDGE, NJ and LUXEMBOURG–(Marketwire – September 29, 2010) – Avaya, a global leader in enterprise communications systems, software and services, and Skype today announced a strategic agreement to deliver innovative, real-time communications and collaboration solutions to businesses of all sizes. The multi-phase deal includes both go-to-market and an industry-first, joint technology integration that seeks to enable businesses to lower costs and expand how employees, customers, partners and suppliers communicate and collaborate with greater convenience and efficiency.

In the first phase of the agreement, Avaya customers in the U.S. market will have access to Skype Connect(TM), a product which adds Skype calling to IP-based enterprise communications systems, providing a Session Initiation Protocol (SIP) communications channel between Avaya communications systems and Skype. Customers with Avaya Aura(TM) Session Manager or Avaya Aura SIP Enablement Server, CS1000, Avaya IP Office, or BCM systems can use Skype Connect to place calls globally for increased reach, while aiming to save on international calling. Enterprise-level security and features such as tracking, recording, regulatory compliance, and more are provided by the Avaya system.

Skype reported 124 million average monthly connected users during the second quarter of 2010. Now, Skype users can make inbound calls to Avaya customers in the U.S. market for free or at a low cost. Calls will be treated with Avaya’s routing, conferencing, messaging, mobility and contact center capabilities, as well as other collaboration services. For example, businesses can:

Establish Skype Click & Call buttons for inbound calling from Web sites
Establish Skype Online Numbers for inbound calling from landline and mobile phones
Route inbound calls from a Skype user to an enterprise extension

Avaya customers in the U.S. market who are interested in Skype Connect can speak with their Avaya sales representative or an Avaya Connect channel partner contacts beginning in October.

In the second half of 2011, Avaya and Skype plan to deliver integrated unified communications and collaboration solutions for enterprises within the U.S. The integration is intended to establish federation between Avaya Aura and Skype communications platforms and both user communities, so that an Avaya end-user and Skype user can engage and interact via presence, instant messaging, voice and video. A business, for example, could use Skype to access an Avaya-based contact center in a simple and highly integrated way to quickly and efficiently resolve customer service issues. The integrated solutions will also allow enterprise IT managers to manage and control the inter-connectivity between end users to meet their corporate IT policies.

“Avaya and Skype have been working along parallel paths to offer innovative, scalable, low cost, SIP-based communications to our respective markets,” said Alan Baratz, senior vice president, Avaya and president, Avaya Global Communications Solutions. “Now, the two companies will work together, striving to improve collaboration and customer service by federating Avaya and Skype solutions for a common user experience that delivers unique benefits for businesses and their customers who are Skype users.”

“Our relationship with Avaya is expected to expand the footprint for Skype Connect into more enterprises in the U.S. market, while allowing us to help Avaya’s customers benefit from Skype’s cost savings and access to Skype’s global user base,” said David Gurle, vice president and general manager of Skype for Business. “We believe our integrated solution in the second half of 2011 is expected to offer the benefits of Skype to a growing number of businesses and open up new ways for people to communicate and collaborate.”

Here’s the liveblog of the announcement:

9:36 am: The event kicks off with Todd Jackson, group manager for Gmail, presiding. He offers a quick overview of the product’s origins and its evolution–the addition of Google Talk and Google Voice. “When you can see and hear the people you’re talking to, it really changes the way you communicate,” he says.

9:36 am: Jackson calls up Vincent Paquet, product manager for Google Voice. He offers yet another overview of the product and Google’s hopes for it. “We wanted to improve the voicemail experience,” he says. “So we took what we learned from Gmail–that people want a lot of storage and an easy way to search and share their messages–and added it to the product.”

9:38 am: Paquet continues, noting the company then evolved the product into a mobile app. More touting of Google Voice features.

9:39 am: To date, Gmail and Google Voice haven’t been able to communicate with one another, but that’s about to change. With that, Paquet calls Craig Walker, product manager for real-time communications, to the stage. And he announces the big news of the day: The ability to make phone calls from Gmail. (Hey Skype! How’s that IPO registration going?)

9:41 am: Walker runs through a usage scenario, noting that if you have a good Internet connection in your home, you no longer need great cell coverage to make a call.

9:43 am: Walker pulls up his Gmail account, pulls up a Googley-looking HTML keypad and calls his travel agent via his Gmail contacts list. He does this without a headset, and the call quality and clarity is surprisingly good.

9:44 am: Interesting. The keypad displays a flag to indicate the country being called. It also displays the rate. With Paquet’s help, Walker calls a hotel in Paris. The rate: two cents a minute. Walker notes that the average rate for such a call is typically well over a dollar a minute.

9:46 am: Well, would you look at that. Walker’s just gotten a voicemail from his travel agent. As he checks it, his travel agent calls him back. She’s not happy that he’s seeking a Paris hotel without her help and begins a little tirade. Walker promptly demonstrates the mute feature and talks for a bit about how he could, if he wanted, pass the call from his computer to his phone.

9:48 am: Missed the details, but evidently, there’s a handy caller ID feature as well.

9:50 am: On to pricing. “We looked at the typical cell phone plan and it just seemed way too high to us,” says Walker. He adds that the same is true of VoIP services. Google’s solution: zero cents a minute for calls in the U.S. and Canada, and two cents a minute for calls to landlines in France, Spain and a host of other countries.

9:51 am: Interesting. Google’s designed some European-style Google phone booths and plans to put them in airports, college campuses, etc.

9:53 am: Walker says, “We’re going to give everyone 10 cents call credit to try the service out.” Afterward, they can buy additional credits through the app.

9:54 am: The rollout of voice calling from GMail to users in the U.S. begins today. No word on countries beyond that, but presumably an international rollout will follow.

9:56 am: Some discussion of Google Talk (chat), Google Voice and Gmail converging into a unified application.

Will there be a soft client? Doesn’t sound like it. Walker says Google prefers to focus its efforts on established Google products. “We don’t want to create another destination for phones; we prefer to keep the ones we have.”

9:58 am: Will credits expire? If you don’t use them, yes–but likely only after a year or so. Pretty standard.

9:59 am: Walker: “We have absolutely no plans to charge for calls in the U.S. or Canada….Our hope is that we’ll make enough margin on international calls to support our low rates.”

10:01 am: Credits will initially be available in $10 blocks.

10:02 am: Any plans for enterprise deployment? No comment, though Paquet seems to suggest this feature is headed for Google Apps someday. “It’s a consumer-level feature only at this point.”

10:04 am: Audio ads? No plans for that, says Walker. Again he notes the margins on international rates and how Google hopes they will be enough to sustain the model it’s described today.

10:05 am: More questions about the product’s future in business.

Paquet: “I think this product requires additional features before it’s ready for enterprise. It’s really just a consumer-level product right now.”

10:06 am: Ah. Google is committing to free calls in the U.S. and Canada through the end of the year. Walker says the company has no plans to raise rates after that, but clearly it’s reserving the right to do so.

10:09 am: Inevitable question about the Apple/Google Voice flap.

Walker dodges, offers nothing.

10:16 am: A few more miscellaneous questions about rates and whatnot and the session wraps up.

M5 offers mid-sized businesses and organizations including Amnesty International and Etsy the ability to manage work calls through the “cloud” — the tech term for the Internet — so employees can make and receive phone calls from anywhere in the world from any Internet-connected device, including cell phones and computers, as if they were going through their office line. Clients can also start a phone call on one device and seamlessly transfer it to another device mid-call.

Late last month, it added the ability to make and take calls through iPads. The app is still in the testing phase, but M5 Chief Executive Dan Hoffman says that it gives its clients yet another option for fielding their phone calls.

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