From the "if it sounds too good to be true..." file.
The International Herald Tribune has a story on a new, internet phone company, Pudding Media, that's offering service without any long distance charges - but there is a catch:
a start-up based in San Jose, California, is introducing an Internet phone service Monday that will be supported by advertising related to what people are talking about in their calls. The Web-based phone service is similar to Skype's online service — consumers plug a headset and a microphone into their computers, dial any phone number and chat away. But unlike Internet phone services that charge by the length of the calls, Pudding Media offers calling without any toll charges.
The trade-off is that Pudding Media is eavesdropping on phone calls in order to display ads on the screen that are related to the conversation. Voice recognition software monitors the calls, selects ads based on what it hears and pushes the ads to the subscriber's computer screen while he or she is still talking.
Maislos said that Pudding Media had considered the privacy question carefully. The company is not keeping recordings or logs of the content of any phone calls, he said, so advertisements only relate to current calls, not past ones, and will only arrive during the call itself.
Besides, [Pudding CEO Ariel] Maislos said, he thought that young people, the group his company is focusing on with the call service, are less concerned with maintaining privacy than older people are.
"The trade-off of getting personalized content versus privacy is a concept that is accepted in the world," he said.