Microsoft snaps up Teleo

The instant messaging market just shifted up a few gears with the news today that Microsoft has acquired Teleo, the Skype-like internet phone/chat service.

In a press release this morning, Microsoft said it plans to use this acquisition as a means to greatly extend the capabilities of MSN Messenger. An announcement on the Teleo website said:

[…] Microsoft plans to incorporate and expand upon Teleo‚Äôs technologies, integrating them into the MSN services infrastructure, with plans to ultimately deliver new VoIP consumer applications in future releases of MSN services, such as MSN Messenger.

Teleo has been in beta since it launched earlier this year (that beta programme is now discontinued, according to the website). I tried it in February and it did look very attractive as an alternative to Skype at a time when Skype’s offering lacked much of what it now comprises.

Microsoft’s new tool is a bit different to that of Google who launched Google Talk last week. The difference is that while Google Talk enables you to connect to other users via your PC for free voice and text chatting, it doesn’t have real phone calling capability, ie, the ability to make and receive phone calls from regular phones such as you can with Skype and its SkypeIn and SkypeOut offerings.

Teleo, on the other hand, has many similarities to Skype including that phone-calling capability.

That gives a pretty clear idea on what Microsoft is thinking as CNET News’ story indicates:

[…] Microsoft has its eyes set on something more like Net phone company Skype’s service, however. A key part of Teleo’s technology is focused on making calls from a computer to an ordinary telephone, a feature that company executives said would start finding its way into MSN Messenger before the end of 2005.

What’s next? What about Gizmo which I experimented with last month? Maybe Yahoo will come knocking on that door.