Teleo acquisition moves Microsoft into VoIP

LONDON — Microsoft has bought, for an undisclosed sum, privately held Teleo Inc. and through the acquisition entered the increasingly competitive Voice over IP business by embedding the start-up’s technology into the MSN Messenger offering.

The deal echoes the acquisition by Yahoo two months ago of Dialpad and comes a week after Google launched a service called Google Talk that connects users over the PC.

Teleo's telephone service will be built into the instant messaging service run by MSN, the software company's internet arm. It is thought Microsoft’s offering will be more akin to Skype’s offering that lets computers talk to fixed and mobile subscribers over ordinary phone networks for fixed rates, as well as free computer to computer telephony.

Brooke Richardson, an MSN product manager, said the company had yet to decide how to charge for net telephone calls but said options included looking at charging subscriptions and fees or linking ads to the service.

Teleo's technology would also allow Microsoft to build so called click-to-call links into the MSN service. This allows users to start a call by clicking on a number listed on any website, a service that could be linked to the advertising model that supports Google and other search engines.

The big internet companies' moves mark an attempt to upgrade their instant messaging systems into full-blown communications platforms.