TELECOM Digest OnLine - Sorted: Yahoo Buys Internet Phone Provider DialPad Communications

Yahoo Buys Internet Phone Provider DialPad Communications

Lisa Minter (
Tue, 14 Jun 2005 17:24:07 -0500

By RACHEL KONRAD, AP Technology Writer

Yahoo Inc. (Nasdaq:YHOO - news) 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 companies would not release financial details of the deal, which
closed Monday.

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. Some in the industry think
VoIP will eventually nudge the 130-year-old circuit-switched phone
network into obsolescence.

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. DialPad subscribers can also buy a prepaid VoIP calling
card. The company has been offering calling plans for about two years
and has more than 14 million users.

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

It's unclear what Yahoo might charge for VoIP service involving calls
to traditional phones.

"We still need to integrate the technology and roll out a product, and
we haven't disclosed those details," Stevens said.

The acquisition is Yahoo's second VoIP announcement in less than a
month. In May, Yahoo introduced a test version of its instant
messaging software with an Internet telephony component that lets
users make free computer-to-computer calls.

On the Net:

Copyright 2005 The Associated Press.

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