Microsoft Acquires VOIP Provider Teleo

Further emphasizing the growing importance of Internet telephony, Microsoft said late Tuesday it has acquired VOIP provider Teleo. Founded in 2003, Teleo offers a service for making voice calls from a PC to a traditional telephone number. Microsoft plans to integrate the technology into its MSN services.

Like fellow instant messaging clients, MSN Messenger currently offers PC-to-PC calling. But the additional of Teleo would mean calls could also be made to standard national and international phone numbers directly from the software.

Teleo's service also integrates with Outlook and Internet Explorer to enable one-click calling while browsing the Web or viewing an e-mail. Microsoft says it "ultimately projects delivering new VoIP consumer applications in future releases of MSN services."

The move puts added pressure on VOIP pioneer Skype, which counts millions of subscribers to its free voice messaging software. The company recently launched a fee-based service dubbed SkypeOut for making outbound calls and is exploring compatibility with mobile devices.

Yahoo, meanwhile, has focused on stealing some of Skype's market share with its recent release of Yahoo! Messenger 7.0. The service offers voice calls to other Yahoo users, but the company has not yet enabled calls to traditional phone numbers.

Likewise, AOL is planning to bolster its AIM Talk feature next spring in a future update to AOL Instant Messenger, currently code-named Triton II. "AIM Talk Plus" will provide users with the ability to make calls anywhere in the world directly through AIM.

"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."

Microsoft did not disclose financial details of the acquisition.

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