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Microsoft eyeing Teleo?

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Yahoo bought DialPad and perhaps that is an incentive enough for other majors – Google and Microsoft – to make a VoIP play as well. There is word that Microsoft is in talks to acquire Teleo, a smallish VoIP player based in San Francisco. It has one of the better SIP implementations.

Teleo adds VoIP to the communications tools already being used by Windows users – cell phones, email, and web browsers. You can receive calls on a PC, or answer them on your cell phone. By clicking on an email address and you can be connected to the person who sent it, if they have VoIP capability.

Teleo is very similar to Microsoft’s Communicator which works well with others Microsoft offerings such as Outlook. But that is primarily an enterprise product, and has been a big area of focus for Microsoft. I am pretty sure Microsoft is looking for ways to add VoIP capabilities to some of their consumer offerings.

Like Skype, Teleo also uses Global IP Sound’s GIPS voice engine. Sources tell me that the founder of the company, Peter Sisson might have also left the company, and the deal is all but done. I dropped him an email but have not hear back from him as yet. Sisson, prior to Teleo was founder and CEO of, an online wine retail and fulfillment company now operating as New Vine Logistics. I have not been able to raise the PR people. Stay tuned for further details.

22 Responses to “Microsoft eyeing Teleo?”

  1. Frank Daley

    Skype’s call quality + ability to work through firewalls and on LANs with NAT have made it especially attractive to many.

    However, earlier this week Michael Robertson of Lindows/Linspire fame launched a VoIP client ( he claims offers all those ease-of-use benefits of Skype, but is fully SIP compliant.

    That is another one to watch.

  2. Interesting question.

    Even though Google is all about the Internet, the Web, and the Browser, you can extend that to say they’re also about the PC.

    You would think that they would be looking at a PC Client and a service that has a strong PC Client. Being strong on the off net/PSTN side probably is not as important to them. In fact, establishing direct, paying/billing end user relationships for phone call level micropayments probably does not thrill Google (at least until they get their PayPal clone in place).

    Of course, Skype would come to mind. Strong PC Client with a Google-sized audience built in.

    Vonage (with basic XTen client interface) treats the PC as a second class citizen – they are more focused on being a telephone replacement vs a communication innovation – probably does not fit.

    AT&T CallVantage is a more innovative telephone replacement than Vonage, but still does not pay much attention to the PC. Probably a hard nut to shake out of the AT&T/SBC tie up, even though it will probably continue to whither there.

    DeltaThree as a behind the scenes enabler of telephone replacements at Verizon and SBC doesn’t seem to fit either.

    The power of Skype in this scenario is that it brings both an IM (non-PSTN) communication component, an internet (PC-PC) communication component, and the PSTN bridging function all at once.

    I think when looking at the potentials, the things to consider are: how much emphasis is on internet communication (IM, PC-PC) vs PSTN off net calling and how strong/unique is the PC client. I think that’s what a Google would look for.

    Plus, doesn’t Skype have the ability to show html/advertising. This is important, too, since Google would derive revenue by showing them ads.

  3. guys thanks for making all those great points. just wondering if you had thoughts on who are the likely players who could get snapped up – i.e. most importantly who will google by to get into the game.

  4. If MS does use it for its own client needs, here are the reasons Teleo is attractive to MS:

    1. Extensive integration into MS Office applications
    2. SIP based
    3. Traverses firewalls without special setup
    4. PSTN connectivity
    5. Works in Corporate environments

    I could see MS buying Teleo based on any of #1, 3, or 4 alone. Teleo is known for its MS integration; firewall traversal is a big hurdle for SIP; and MS could just be looking for PSTN functionality.

    I’ll be interested to see how Yahoo succeeds in the firewall traversal. One reason why Skype is the best.

  5. I don’t know why MS would buy Teleo, but I have a unique perspective. Rather than integrating Teleo into their own voip service(s), MS could buy Teleo as an offering in their product line. MS is primarily in the business of selling software and Teleo is a very attractive client/engine for various types of organizations, including ISP’s, web services, and integrated voice products and services.

  6. I agree that Teleo alone has merits.

    But is MS interested in a client or a service? Microsoft has clients galore – one more adds clutter (not that that stops them).

    I just cannot rationalize a lot of interest from a high margin business like Microsoft – or even MSN – in pushing penny telephone termination minutes as microtransactions.

  7. marry the feature/client software with the microsoft’s other products. it might be easier than trying to reinvent the communicator. i think the client software from teleo is actually pretty good. surprisingly good. in addition teleo has better capabilities in trying different phone numbers together.