I read this morning in the Wall Street Journal that Teleo was picked up by MSN. I wrote about Teleo back on February 13 of this year. They have impressive technology and integrating it into Microsoft applications will likely make it that much better. In my article I talk about some of the unique features Teleo brings to the table such a toolbar that allows you to control telephony from a multitude of applications. So we aren’t just talking about bare bones VoIP but applications bundled with VoIP that make the experience of communicating that much more efficient.

Alas, I also wrote about a crash of the Teleo system and I am sure with Microsoft’s help, they will have more resources to fix these issues.

The coming VoIP wars are all the rage. Who is going to win is the question I keep hearing about. Skype and Vonage are current winners and the cable companies aren’t far behind but Google, MSN, Yahoo! and AOL are really going to get this market to the next level and quickly.

I still have one concern and that is how smaller service providers will compete in this market. Obviously providing plain vanilla VoIP is not going to cut it anymore. You need to differentiate yourselves and stay ahead of the new entrants that want to give away everything for free and sell ads around the experience.

If you are a smaller VoIP service provider and aren’t dealing with these issues your days may be numbered. Start thinking about niches you can fill and essential services customers want to pay for. The stickier the services, the better.