Monday, June 13, 2005

Yahoo! Acquires DialPad, Entering VoIP Market

Yahoo! has acquired DialPad, a provider of Internet Telephony services. Financial terms were not disclosed.

Yahoo! plans on leveraging Dialpad's PSTN calling capabilities to add to Yahoo! Messenger's recently enhanced PC-to-PC voice calling offering.

DialPad currently offers several services, include DialpadMonthly -- a monthly subscription for calls to the U.S. from over 200 countries with rates as low as 1.7¢ per minute; DialpadPrepaid -- a prepaid service that allows calls to and from over 200 countries; and DialpadCallingcard -- a VoIP-based calling card that can be accessed from any phone in the U.S.

DialPad said it plans to discontinue the Calling Card service.

  • DialPad is based in Milpitas, California. The company was founded in 1999 and originally pursued an advertising-based model for its Internet calls. The company's customer base quickly grew to over 14 million. The erosion of the online advertising market in early 2001 forced the company to file for Chapter 11 protection later that year. Current Chief Executive Officer Craig Walker was appointed to head the restructuring. The business was transformed from a free to a pay service. DialPad said it reached profitability in late 2003.

  • In May 2005, Yahoo! launched a public beta for its next generation instant messenger service, offering free PC-to-PC calls, photo sharing, better tools to expand friends' lists, increased spam protection, better integration with online games and other features. It does not provide direct PSTN connections. The free worldwide calling feature to other Yahoo! Messenger users also integrates with Yahoo!'s voice mail service. Voicemail messages can be left for friends who are away from their desks or offline, and can be retrieved through a call history log that displays all voicemail messages, as well as in-bound and out-bound calls. To further personalize the PC-to-PC calling experience, people can customize ring tones for their friends.

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