Google Inc. is getting into the phone business.

The Mountain View company is introducing a service today that allows users to make free domestic calls, along with transcribing voice mail messages, in a challenge to eBay Inc.'s Skype and major long-distance carriers like AT&T.

Google's goal is to become a central hub for people to manage and make phone calls, an audacious plan that will face stiff competition from established rivals and startups. The service, Google Voice, is the latest effort by the company to expand beyond online search and advertising, two areas it already dominates.

Google's release is actually an upgrade to GrandCentral, a company and product it acquired last year that allows users to have one phone number for their home, work and cell phones. Users can also screen calls, save and share voice mails and route calls to different phones depending on the caller.

With the overhaul and new name, Google is adding another dimension to the product and aiming it beyond its tech-savvy base. The new offerings, particularly free domestic calls and cheap international calls from regular phones, probably will appeal to average consumers.

Calls can be made two ways. One is for users to dial their Google Voice number and press 2 at the prompt. Or they can click a number in their online dashboard to have the service ring their phone, and then connect with the other party.

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Unlike domestic calls, international calls are charged per minute and require users to open a Google Checkout account, which stores credit card numbers. Calls to landlines in the United Kingdom and France cost 2 cents per minute, while a call to a mobile line in France costs 15 cents per minute.

Users can't completely abandon their basic phone service. But they no longer need to pay for domestic long-distance calls, a possible blow to long-distance providers.

EBay's Skype online calling service offers free domestic and international calls made to and from personal computers. There is a fee for calls made from computers to landline and mobile phones.

Vincent Paquet, who founded GrandCentral, said he doesn't see Google Voice as a threat to phone companies or Skype, saying that "the notion of long-distance calling is becoming less and less relevant every day."

"We certainly didn't envision the product as a way for you to change your current cell phone plan, but a way to manage your personal communication," he said.

The service will be offered first to GrandCentral users, then made widely available.

Google has tried before to expand beyond its search roots, with mixed results. Social networking service Orkut has never caught on in the United States, for instance.

Google released information about the service on condition that The Chronicle not reveal details to outsiders before today.

Craig Settles, president of Successful.com, a technology marketing consultant, said that companies run a higher risk of failure when they go outside their area of expertise.

In a statement Wednesday, eBay said it expects Skype to double revenue to more than $1 billion in 2011 and that its leadership position in Internet calling has strengthened.

Google Voice also offers automatically transcribed voice mails with voice-recognition technology. The transcribed messages, which allow users to avoid checking lengthy voice mail, can be sent by e-mail and to cell phones.

It's a technology already offered by startups such as SpinVox and SimulScribe.

Paquet acknowledged that the software doesn't perfectly understand what people say, but said that it will improve.