Microsoft Buys Internet Phone Company Teleo

Microsoft Corp. said it had acquired Teleo Inc., a San Francisco start-up whose software lets people make calls from computers to traditional telephones.

The deal for privately held Teleo, which closed Monday, could allow Redmond, Wash.-based Microsoft to gain a competitive edge in the growing market for Internet-based calling services. Terms were not disclosed.

Microsoft already uses voice over Internet protocol technology in some products, including its instant-messaging program.

But Teleo’s technology, still in development, is notable for such features as click-to-call: A user can click on a phone number -- listed, say, on a Web page -- and immediately reach someone with a regular phone number on the circuit-switched network.