Yahoo! Buys Internet Telephony Company

Yahoo! believes that the future of IM lies in voice communications, and the company has backed up that belief with the acquisition of Dialpad Communications, a company that lets you place calls from a PC to a regular telephone. The Internet giant recently upgraded its Yahoo! Messenger application to add better support for PC-to-PC voice communications and now plans to use Dialpad to broaden voice communications support. Dialpad currently offers unlimited calls to the United States and Canada for $11.99 per month. The Dialpad acquisition puts Yahoo! in direct competition with Skype, a popular Internet-based phone service. Yahoo! hasn't announced any plans to launch a VoIP service that doesn't require a PC, but the Dialpad acquisition would make such a launch much easier. Yahoo! is in a tough position because the company partners with many local telephone providers, such as SBC Communications, with which it would directly compete if it implemented a VoIP offering.