Yahoo dials into internet telephony

16th June 2005 Yahoo has signalled its intention to offer users of its portal the ability to make ultra-low cost calls from their PCs and PDAs to standard telephones with the announcement it is acquiring US-based Dialpad Communications, a pioneer of the Internet telephony services.

The deal – for an undisclosed sum – will provide Yahoo with a technology base that already enables some 14 million Dialpad customers to channel their calls over the Internet, with connections to standard lines only occurring at local exchanges. Currently, Dialpad customers pay a flat fee of $11.99 a month for unlimited calls in the US and Canada.

The Internet portal leviathan says has yet to integrate Dialpad’s technology with its own systems, and is not disclosing details of a roll out date.


Separately, Yahoo is currently offering a trial version of Messenger with Voice, a version of its instant messaging service that supports voice-over-Internet protocol (VoIP) communications. The beta version enables users free worldwide PC-to-PC calls as long as their PCs are equipped with a microphone and speakers or a VoIP headset.

The acquisition of 40-person Dialpad puts Yahoo on a collision course with Skype Technologies, the Internet telephony start-up run by the founders of KaZaA, the P2P file downloading service. Industry analysts suggest that Yahoo had been in talks to acquire Skype before moving on Dialpad.

By Kaia Hødnebø

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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