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Tuesday, November 07, 2006

Annual Microsoft Day: VoIP For Everyone

Stocks: (MSFT)(TWX)(CMCSA)(VG)(VZ)(T)

Steve Ballmer, MSFT CEO, says that VoIP is going to be built into almost all of its software platforms beginning next year. That means that VoIP capability is going to be embedded in Microsoft's server software, operating system, and desktop applications.

It would appear that Microsoft is tired of being the huge also-ran of tech. It is not attacking across a number of fronts using its huge R&D and balance sheet capacities.

VoIP, Vista, Zune, Xbox Live, Mobile Windows for cell phones. The company is making progress in all of these fields, and in some, significant progress.

The VoIP products could be very, very disruptive. Companies like Time Warner Cable and Comcast are counting on adding VoIP subscriptions to add revenue on top of their TV and broadband offerings. The MSFT initiative by-passes that by using cable's pipes to deliver Microsoft VoIP.

The telecom companies have even more to worry about. Verizon and AT&T are hoping that fiber-to-the-home will help them sell their current voice services with IPTV and broadband. But the MSFT VoIP initiatives along with offering from cable and operators like Skype and Vonage could hit the phone companies where they live--voice service.

Skype and Vonage are not immune from Microsoft's move either. Everytime a new, large VoIP initiative hits the market, Ebay's purchase of Skype looks more misguided. And, Vonage is barely hanging onto its franchise as its stock hit a new low almost every week.

If Microsoft is embedding VoIP capacity in all of its major software, a lot of companies are about to have a new headache.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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