Microsoft muscles in on internet telephone market

Microsoft muscles in on internet telephone market

Thursday September 01, 2005 (0139 PST)

The voice wars between the search conglomerates intensified this week when Microsoft’s MSN said it had bought VoIP provider Teleo, a move that could give the portal an edge in communications.
Microsoft Corp. acquired a San Francisco company that specializes in technology for making calls from PCs to regular telephones -- trying to give its MSN unit an edge over rivals in the increasingly crowded instant-messaging market.
The acquisition further solidifies Microsoft's "pervasive" communications strategy, says Daniel Hong, senior CRM analyst at Datamonitor. "Voice is the next killer app for PC-based messaging. Integrating Teleo's technology, Microsoft will be able to provide more intuitive and feature-rich VoIP applications to end users." The company certainly is looking to become more of a player in voice technology, says Rob Arnold, enterprise telephony analyst at Current Analysis. However, the acquisition will have less of an impact on the contact center, and "will definitely have more of an effect on the savvy multimedia user," Arnold says.
In addition to new entrant Google, Microsoft's main instant messaging competitors are Yahoo! and AOL. Yahoo!'s instant messenger had 78.8 million users in July, compared with 189.7 million for MSN Messenger and 64.4 million for Time Warner Inc.'s AOL Instant Messenger.
Yahoo! wants to let customers make calls from its messaging program to land-line phones in the coming months.
Privately held Teleo was founded in 2003. Its service let users make calls from a PC to mobile phones, regular phones and other PCs.