Yahoo buys Dialpad, enters Net phone market

Internet portal giant Yahoo has acquired Dialpad, a 6-year-old provider of Internet phone services. The acquisition, which was announced on Dialpad's Web site, will place Yahoo in direct competition with traditional phone companies such as SBC, as well as Net phone providers like Skype and Vonage.

In its announcement, Dialpad noted that "Yahoo plans on leveraging Dialpad's PSTN calling capabilities to add to Yahoo Messenger's recently enhanced PC-to-PC voice calling offering. These products are very complementary and by combining our strengths, we are better positioned to take advantage of the fast growing IP telephony market and build a range of exciting new services." Dialpad claims to have 14 million users.