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February 3, 2006

What’s Microsoft doing with VoIP?

Posted by David Hunter at 10:24 AM ET.

After Microsoft acquired VoIP technology company Teleo last August, there was lots of speculation about Microsoft’s VoIP plans. Olga Kharif at BusinessWeek provides a detailed update on the current state of play in Voice over Microsoft Protocol? Some excerpts:

Microsoft has yet to make public its plans for Teleo, but BusinessWeek Online has learned that the software maker plans to weave Teleo’s bells and whistles into a number of applications, such as Hotmail and instant messaging. Microsoft also hopes to integrate VoIP into its new paid-search platform, which is being rolled out worldwide, as well as a planned classified-ad service.

The VoIP efforts are aimed at gaining traction in online advertising, where growth has been stunted by the outfit’s anemic Web-search share.

Ouch, but it’s true. Not to mention the slow roll out of adCenter.

Other parts of MSN are under pressure, too. Visits to MSN’s Instant Messenger site, where users can download Microsoft’s IM software, have dropped since the summer, according to Web consultancy Hitwise.

VoIP entrepreneur Jeff Pulver says Microsoft is losing IM users to Skype. Traffic woes were a major reason for MSN’s September management restructuring, says Matt Rosoff, an analyst with consultancy Directions on Microsoft.

As Microsoft tries to fight back, VoIP will be one of its major technology weapons this year. The software giant will roll out the various VoIP capabilities between February and August, sources tell BusinessWeek Online. Brooke Richardson, Microsoft’s group product manager at MSN, confirms that the company is considering adding VoIP functionality to many of its applications and services. “Voice is becoming not a nice-to-have, but a must-have” feature, she explains.

Here’s how it’s expected to work. Microsoft will add PC-to-phone calling capabilities to its IM and e-mail services. That means Hotmail or IM users, for instance, will be able to place calls directly from their e-mail or IM address books. Microsoft plans to introduce Windows Live Messenger, or LM, offering such features this year.

Finally, VoIP technology will come in handy as part of Windows Live Expo, an upcoming classifieds service from Microsoft that’s expected to jump-start an era of social-networked search.

Much more by following the link. I don’t believe VoIP is sufficient for a turnaround, but Microsoft will surely need it to get into the game.

Filed under Acquisitions, Coopetition, Google, Hotmail, MSN, MSN Messenger, MSN Search, Skype, Technologies, VoIP, Windows Live, Windows Live Expo, Windows Live Messenger, Yahoo, adCenter

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