"Teleo has great technology to deliver superior VoIP quality and an excellent overall customer experience," said Blake Irving, corporate vice president of the MSN Communication Services and Member Platform group at Microsoft, as it was announced that Microsoft had acquired the innovative VoIP company whose initial planned service offering, also called Teleo, was designed to allow customers to use their PC to make phone calls to cell phones, regular phones or other PCs.

"This acquisition opens up infinite opportunities for Microsoft to enable even more relationship-centric communications experiences for our customers in the future," Irving enthused.

Founded in 2003 and headquartered in San Francisco, Teleo is a privately held company. Financial details were not disclosed.

Microsoft expects to combine the technology and expertise of Teleo with the existing VoIP investments of MSN to further develop products and services that connect consumers to the people and information that most matter to them.

VoIP technology already is prominently featured in MSN Messenger as well as other Microsoft products and services. Microsoft plans to incorporate and expand upon Teleo technologies, integrating them into the infrastructure that supports MSN and ultimately projects delivering new VoIP consumer applications in future releases of MSN services.

Through its integration with Microsoft Outlook and Microsoft Internet Explorer, the Teleo service was designed to facilitate click-to-call dialing of any telephone number that appears on-screen, for example through a Web site or via search results or e-mail.

Members of the Teleo executive team will continue to work closely with MSN following the acquisition, and a number of Teleo product developers are expected to join the MSN ranks.

"It's going to be very exciting to see Teleo software extended into MSN products and services that millions of consumers worldwide rely upon every day for their information and communication needs," said Wendell Brown, co-founder of Teleo. "The union of our respective technologies and talents has the potential to deliver great value to customers."