Internet communications provider Yahoo Messenger (YHOO), and network equipment maker Linksys, are teaming up to bring lower cost telephony solutions to consumers, announcing a new phone on Thursday capable of making calls over the internet as well as traditional land-lines.

The dual-mode cordless phone will allow users to connect to their home phone lines to make phone calls over traditional copper networks. It has the added benefit, however, of allowing users of Yahoo Messenger to connect to the internet to make free Internet-based calls to contacts on their Yahoo Messenger contact lists.

Yahoo! Messenger and Linksys are giving consumers the flexibility to make and receive free Internet calls from the same phone they use for their home line, said Jeff Bonforte, senior director of Real Time Communications, Yahoo! Inc.

Linksys, a subsidiary of Cisco Systems (CSCO), will include a base-station that can connect to a personal computer by USB, and tradition phone lines in the package. Expected later this month, the companies suggest a retail price of $99.99.

Shares of Yahoo rose 55 cents, or 2.04 percent to close at $27.45 on the Nasdaq exchange, while shares of Cisco rose $1.61 or 6.41 percent to close at $26.71 also on the Nasdaq.

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