Microsoft’s online portal buys Teleo as the software behemoth tries to one-up search giant Google.

August 30, 2005

Fresh on the heels of Google’s voice chat debut last week, Microsoft’s online portal MSN said Tuesday it has acquired Teleo, a San Francisco-based VoIP provider, for an undisclosed sum.

The financial details of the transaction were not disclosed. Company representatives said MSN had made a significant investment in VoIP so that consumers down the road will have another option to stay connected.

Portals MSN and Yahoo, and search engine Google have been adding communications services and other offerings to build their brands and encourage users to spend more time on their sites. On August 24, Google launched an instant messaging service called Google Talk as it sought to catch up with its competitors (See Google Launches IM Service).

But Google doesn’t offer VoIP services.

With Teleo, MSN gets a two-year-old privately held company that allows consumers to call cell phones and landlines from their computers. Redmond plans to integrate Teleo’s technology into future releases from MSN.

Read more at: red herring.com