VoIP wars intensify as Microsoft buys Teleo


31 Aug 2005

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In the wake of Yahoo! and Google’s recent moves into the voice over internet protocol (VoIP) arena, Microsoft has acquired VoIP start-up Teleo, whose technology allows phone calls to be made from PCs to traditional phones. Terms of the deal were not disclosed.

VoIP is already incorporated in MSN Messenger as well as other Microsoft products and services. MSN Messenger allows users to talk to each other online, PC to PC, with no call charges. Additionally, if both users have a webcam installed they can also have a full screen video conversation free of charge.

Microsoft said it planned to integrate Teleo’s technologies into the infrastructure that supports MSN Messenger and with the intention of launching new VoIP consumer applications in future releases of MSN services.

“Teleo has great technology to deliver superior VoIP quality and an excellent overall customer experience,” said Blake Irving, corporate vice-president of the MSN Communication Services and Member Platform Group at Microsoft. “This acquisition opens up infinite opportunities for Microsoft to enable even more relationship-centric communications experiences for our customers in the future.”

Teleo, which was only founded in 2003, had yet to launch a commercial product. Its Beta offering, also called Teleo, was designed to allow customers to use their PC to make phone calls to mobile phones, regular phones or other PCs. Through its integration with Microsoft Outlook and Microsoft Internet Explorer, the Teleo service was designed to facilitate click-to-call dialling of any telephone number that appeared on-screen – such as through a website, via search results or email.

Yahoo! and Google, Microsoft’s two biggest competitors in the internet search and messaging market, have both made significant VoIP announcements recently – Yahoo! with the acquisition of DialPad, a VoIP company that specialised in PC-to-PC and PC-to-phone services to consumers, and Google with the launch of Google Talk, its free VoIP service for Google webmail users.

By Brian Skelly