For now the service is limited to calls of a “couple of minutes” but the company says they are looking to allow calls of up to 20 minutes soon.

The business model is similar to Free 411, which allows free directory assistance calls with an advertisement based business model. But Free 411 tries to reduce costs with an automated system and smart use of data. It’s not clear that IconDial can lower its costs to any reasonable level, particularly when it allows calls to mobile phones (which have built in costs to the caller in most countries). There’s just no way the company can recover those costs with a short audio ad.

So I guess what I’m saying is, try it now while it’s still around.

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A few months ago, we wrote about Jingle Networks’ intention to start a voice ad network that would see companies that receive a high-volume of calls place ads during caller wait time. And according to the company, that service has launched today.

Known for its 1-800-FREE-411 service, Jingle Networks’ voice ad network will allow any company with high call volume to insert audio advertisements in their calls and attempt to take advantage of the company’s installed base of 130,000 advertisers. There’s currently no word on how the revenue will be shared between Jingle Networks and its partners.

In-call advertising is quickly becoming an important element in increasing revenue while callers wait. But the question remains: will wait times, which already annoy callers, upset them even further now that ads will be piped through the phone? You can bet on it.

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Jingle Networks has already captured a six percent market share of directory assistance calls with its 1-800-Free411 service. But, with IPO rumors swirling, that might not be a big enough business. What if Jingle expanded into a voice ad network? I have learned that it is preparing to do just that. Confirms CEO George Garrick:

At this point I’d call it the Jingle Ad Network. We have advertisers that want to get into more environments, and have technology to serve ads. We are talking to publishers about acquiring enough inventory to be significant. We are starting to sign deals with companies that have large numbers of calls. I imagine it will be a few months yet before we bring anything live, probably later in the third or fourth quarter.

Today, Jingle offers free directory assistance calls in exchange for playing two audio ads, one before the caller asks for the number and one before the number is given. Its Free411 service gets 20 million calls a month. That is 40 million advertising opportunities a month. Not every call can be matched with an ad, but a very large number can. Already, Jingle has more than 150,000 advertisers, many of them local. National advertisers include McDonald’s, Earthlink, AMC Theaters, FordDirect, Allstate, Cablevision, Columbia House, Days Inn, Miller Brewing Company, and Travelodge. Its top categories include stores, restaurants, banks, and doctor’s offices.

Jingle can use the call volume and ad inventory on Free411 as an anchor for a broader voice ad network. Any information line, movie line, or call center could hook into the ad network to lay ads while people are on hold. Most companies look at their call centers as a cost center. Being able to generate one to two cents per call in revenue would be significant for many companies. And as voice apps take off on the Web, that could present another opportunity, although Garrick says the call volume is not there yet. As with any ad network, it is a numbers game. The more call volume Jingle can fill with ads, the better its economics.

Does this mean, Jingle is preparing for an IPO. Garrick doesn’t rule it out. He says:

We expect to become profitable before the end of this year. If we look at the public markets, it won’t be until next year.

Jingle is not the first company to try to do this. Already, it faces competition from startup VoodooVox, which is building its own voice 2.0 ad network. VoodooVox claims that it currently powers 320 million ad-supported calls per month, and reaches 30 million consumers. But Jingle does have a leg up in that it already generates a lot of ad inventory on its own, and it is expanding its own free ad-supoprted calls to include driving directions, weather, and other information services.

Of course, there is always the specter of Google, which offers its own free Google411 directory assistance service. Google411 does not even have ads yet, and is treated more like a research project to test voice recognition algorithms. But Google could jump on the voice advertising train any time it wants.

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1-800-FREE411 is getting 20 million directory-assistance call a month, which is up 18 percent from last March. The company says that gives it a 6 percent market share of the 3.8 billion total 411 calls placed in the U.S. annually (up from 4 percent about a year ago). 1-800-FREE411 is more of a mobile and pure telephone play. It’s Website, where you can also get free directory numbers and is integrated with Skype, is basically an afterthought. Traffic to the site has declined from a peak of about 850,000 U.S. visitors a month a year ago to less than 100,000 a month, according to comScore. But then, you can get phone numbers on the Web simply by searching Google.

Parent company Jingle Networks has raised nearly $75 million in four rounds from First Round Capital, Goldman Sachs, IDG Ventures Boston, and Hearst.

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The free 411 service, Live Search 411, is a mobile service developed in partnership with recently acquired TellMe. You can get the service on any phone by dialing 1-800-CALL-411 (1-800-225-5411).

Like GOOG 411 users can get local directory service. All you have to do is say the city and state, then ask for the business or category to hear a list of options. However, the two services differ in their details. Live Search 411 also offer other services, such as movie times, weather, and traffic info. Like Google, internet enabled phones can have the results text messaged to them with a link to a map, but no directions. Those of you with really old phones and a need for directions can still try Dial Directions, a service that sends them to you in plain text over SMS.

They also differ in some smaller ways as well. Live Search prompts the user for input more often than GOOG 411, which assumes a lot of responses unless the user says otherwise. Live 411 lets you search by city district as well, which is useful if you want to find a restaurant around where you live. I found the voice recognition on both services to be equal, with both failing for names of some Italian restaurants I searched.

The fight between these well financed services will likely be a long one, and no one’s making any money yet.

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This news comes very quickly after Jingle announced a patent on ad-supported 411 calls. Founder Scott Kliger said the company would be using the patent to go after competitors in the next few months – those competitors include Google and AT&T.

Personally, I find this deal a little dumb. Skype users are generally on an Internet connected device, and a web search is almost always an easier way to find information on a business v. a 411 call.

I also think Jingle’s patent borders on the absurd and highlights many of the problems with our U.S. Patent system. If taking a paid service, pairing it with an advertisement and then distributing it for free is patentable, then we’re in real trouble. Jingle was the good guy when they were trying to make 411 calls cheaper for consumers. Now, they want a piece of the action every time another company tries the same thing. That leaves a bad taste in my mouth.

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If the patent is enforceable, and Jingle has the stomach to try, it will be a significant hurdle for their competitors. The company has raised significant capital (over $60 million), but that is nothing compared to the resources of Google and AT&T. If those companies are serious about this business, it could get ugly in the courtroom.

When we last heard from the company, they claimed to be receiving 17 million monthly calls and had grabbed over 6% of the U.S. market for directory assistance calls.

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Goog-411 can be accessed by dialing 1-800-GOOG-411. The product is completely automated and there is no way to talk to a human for additional or clarifying information. You tell it your city and state, and then ask for a specific business or business category. In my tests the product was excellent. Although the voice recognition was only working at about 70% efficiency, I just said “back” and retried when it didn’t understand what I said. Results are spoken back or text messaged back to you, and you are automatically put through to the phone number requested.

GOOG-411 is using Google’s normal local business information available on Google Maps and elsewhere. Businesses that want to add or correct data can do so here.

The product competes head on with Jingle Networks, which has taken 6% market share in the U.S. 411 business over the last year. AT&T is also experimenting with free 411 calls. None of these products come anywhere close to as good as TellMe’s rich client business information tool for mobile phones, but few phones support TellMe at this time (TellMe was recently acquired by Microsoft).

The paid 411 market is so dead. I’m betting these free alternatives take at least 50% market share within a couple of years.

Update: This is actually a product that Google’s been testing in various formats for some time. Steve Poland (a regular contributor here) is pointing me to some posts (and here) by Greg Sterling from last year that discuss this. The earliest reports on this are from October 2006, and the service may be from an acquisition of 1-877-520-FIND. More information here.

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About 2.6 billion mobile 411 calls are made in the U.S. each year, and is a $7 billion/year market. Jingle reports that they received 17 million calls in February, and have had 170 million calls total (they just recently announced their 100 millionth call last November).

The company has raised a boatload of cash – over $60 million to date – and AT&T recently started competing with them.

Jingle makes money from short advertisements played to the caller before the requested phone number is delivered. Given their stellar growth, many consumers are obviously willing to give up 12 seconds of their life to avoid 411 fees that range up to $3 per call.

Last October I interviewed Jingle CEO George Garrick and investor Josh Kopelman. Listen to the podcast over at TalkCrunch.

On a related note, Tellme’s new mobile voice activated 411 product is also free and absolutely stunning.

[Update: Originally, this post said 1-800-FEE411 had 6 percent market share of all U.S. 411 calls. The company later clarified that figure was for mobile 411 calls. Their market share for total U.S. directory assistance calls at the time of this post was 4 percent.}

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Jingle’s success has been significant. They have raised over $60 million and have quickly taken 3% of the U.S. 411 market. Jingle has taken over 100 million 411 calls to date. We interviewed Jingle Networks CEO George Garrick and investor Josh Kopelman back in October – listen to it here. Our previous coverage on TechCrunch is here.

AT&T’s service, which will be available at 800-Yellowpages, looks to be very similar, although it is currently available only in Bakersfield, CA, Oklahoma City, OK, and Columbus, OH. Instead of the one advertisement that Jingle plays, however, AT&T will be playing up to four ads, from 5-10 seconds each. That’s asking a lot of their customers (up to 40 seconds of ads before the information is given), but AT&T may be able to compete based on quality of information, something that Jingle has been criticized for in the past. The main product page for 800-Yellowpages is here, and the FAQs are here.

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So while carriers continue to charge an average of $1.25 for each 411 call, Jingle Networks is providing the same service for free and adding a fifteen second advertisement after you request a phone number but before you are given the results. Consumers don’t seem to mind the advertising – less than a year after launch they claimed to have taken 3% of the total U.S. market for 411 calls, with 450,000 calls per day (out of 6 billion total yearly 411 calls).

Today Jingle Networks announced a fourth round of financing – $30 million from Goldman Sachs and Hearst Corporation, at a valuation of around $150 million. This comes after a $26 million round in April 2006, a $5 million round in December 2005 and a small angel round of financing last year.

I spoke to CEO George Garrick and early investor Josh Kopelman today about the financing and the Free-411 business in general. Listen to the podcast at TalkCrunch.

Advertisers include 1-800-flowers, 1-800-Mattress, 1-800-Contacts, CBS, Discount Tire, ID Media, Ingenio, OMD, Roto Rooter, The South Beach Diet, Vonage and Zagat Survey. In many cases users are given the opportunity to go to an advertiser instead of their requested phone number. For example, if you request a number for a local florist, you may be asked if you’d rather try 1-800-flowers with a discount coupon instead.

Ultimately 411 is just another way for people to search for information, and Google will clearly be eyeing this space as the company matures.

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Our earlier profile of Free411 is here. The service is a free alternative to $1-$2 directory calls. The catch? You have to listen to a 12 second advertisement.

It works mostly like normal directory assistance. You dial their phone number and go through an automated system that asks for the location, type of listing and listing name. While you are waiting for the number, you must listen to a 12 second advertisement from a competitor to the service. If you choose to use the competitor instead, you simply dial “1″ to redirect your call.

Another difference is that if there is no local advertiser for the business type you have requested, the business receiving the call hears a short message at the beginning of the call telling them that the call is via Free-411. A tele-sales group follows up with the business to try to get them to advertise. Free-411 claims a 13% success rate in converting businesses to advertisers.

And they are seeing explosive growth. Free411 is now handling 7 million calls per month – out of a total of 500 million directory assistance calls per month in the U.S. That’s about 1.5% of the total market. Investor Josh Kopelman from First Round Capital has another way of looking at it: “1-800-FREE411 has the potential to shrink an $8 billion market.”

Directory assistance calls are expensive – $1 and higher – and yet 6 billion of them are made every year in the U.S. 1-800-free-411 is a new and brilliant service from Jingle Networks that provides this service to consumers for free.

1-800-FREE411 was created to provide callers with a free alternative to the skyrocketing rates being charged by phone companies for directory assistance (411).

The service is made possible by thousands of national and local businesses who sponsor this service with brief valuable audio advertisements that are played to callers who request businesses in their yellow pages category. This advertising model allows businesses to acquire new customers over the phone, cost effectively, with little or no risk. Meanwhile callers get free directory assistance, potentially saving each of them thousand of dollars per year.

The company was founded by veteran advertising and technology executives who pioneered some of the most innovative and successful advertising solutions in online media and now they are opening yet another channel for businesses to acquire new customers. This time, it’s over the phone.

The service works mostly like normal directory assistance. You dial their phone number and go through an automated system that asks for the location, type of listing and listing name. While you are waiting for the number, you must listen to a 12 second advertisement from a competitor to the service. If you choose to use the competitor instead, you simply dial “1″ to redirect your call.

Another difference is that if there is no local advertiser for the business type you have requested, the business receiving the call hears a short message at the beginning of the call telling them that the call is via Free-411. A tele-sales group follows up with the business to try to get them to advertise. Free-411 claims a 13% success rate in converting businesses to advertisers.

Free-411 gave a presentation at DEMO last week, which is available along with additional company information here.

As a user I love this, and I would highly consider advertising with them if I owned a small business.

Team

Scott Kliger – Founder and CEO
Tom Latinovich – Founder and SVP
Joshua Kopelman – Chairman
Susan S. Bratton – Advisor