When an audio signal, like the sound of your voice during a phone call, is sent over the Internet, the sound is first compressed so that it will use less network bandwidth. When the audio signal arrives at the other end, it is decompressed so that it can be heard. Some audio fidelity is lost in this process. The audio stream is less compressed with a broadband connection than with a dial-up connection, so the sound quality is higher. The difference is slight, however, and is often unnoticeable.

The degree of compression is determined by the codec setting, which is initially based on the type of connection you choose (dial-up, broadband, or high-speed LAN). During a call, Yahoo! Messenger with Voice continuously monitors the voice quality and dynamically reduces or increases the codec setting. This ensures maximum sound quality, based on your actual bandwidth.