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Yahoo buys VoiP company

In a bid to become an all-encompassing internet communications company, Yahoo has revealed plans to broaden its VoIP offerings.

Yahoo Inc. said Tuesday it had acquired DialPad Communications Inc., a 6-year-old company whose software lets people to place calls over the Internet for a fraction of the cost of regular telephone service.

The Internet's leading portal will use DialPad to expand its product array in the burgeoning niche of Voice over Internet Protocol, or VoIP, said company spokeswoman Joanna Stevens.

The technology converts conversations into data packets that traverse the Internet over broadband connections.

Yahoo also announced yesterday it has licensed a SIP-based development kit from Xten Networks Inc to beef up its PC-to-PC VoIP.

Yahoo currently is using just the voice-engine component of Xten's software development, called eyebeam.

Milpitas-based DialPad, which has about 40 employees, competes with a growing number of startups that reroute calls from computers to servers to telephones.

Current mainstream VoIP services let callers use standard phone handsets or even cell phones to make or receive calls, a big improvement on the computer-to-computer of early Internet telephony.

Depending on the subscription plan, Dialpad charges as little as 1.7 cents per minute for calls, including international calls to more than 200 countries.

New products from Yahoo that integrate DialPad technology could debut within a month, Stevens said.

Resource: BusinessWeek

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