Eyeing Web phone on a chip, Intel invests in Jajah

By Eric Auchard

SANTA CLARA, California (Reuters) - Web-based phone-calling company Jajah Inc. has won Intel Corp.'s (INTC.O) backing for its bid to blur the distinction between phones and computers, the two companies said on Wednesday.

Jajah, which has more than 2 million users of its free or low-cost global calling service, said Intel Corp. has agreed to marketing, patent and distribution deals with it and Intel's venture capital arm is leading a $20 million financing round.

"Computers are becoming phones and phones are becoming computers," Jajah Chief Executive Trevor Healy said in an interview.

The deal gives Jajah access to Intel's sales channel of thousands of dealers, personal computer makers and software developers, and could lead to Jajah becoming a desktop icon on PCs later this year, Healy said, although no plans are set.

Over time, Jajah hopes to see its Internet phone-calling technology being embedded into microprocessors, or so-called central processor units (CPUs) -- Intel's main business.

"It is our intention to bring a best-of-class, next generation solution to the market which will be embedded in any CPU for use on any computing device," Jajah co-founder Daniel Mattes said in a statement, without elaborating further.

Jajah encourages consumers to use its service through a Web browser. But, with Intel, it is now looking at reviving an early version of its software that runs on PC desktops.

Intel Capital's undisclosed investment was one of six new investments totaling $31 million it announced on Wednesday at its annual CEO Summit in Carlsbad, California. A second strategic Jajah investor will be revealed later.