Small in size but with significant potential, Microsoft’s acquisition of San Francisco, Calif.-based Teleo this week provided more evidence that the voice-enabled technology space is becoming increasingly important, and even more urgent, to Internet and software companies.

Teleo makes voice-over-IP technology for PC-based voice communication. It was ffounded in 2003, Teleo ran a trial of a Beta version of its client software, but the trial has ended and the technology will now be incorporated into Microsoft Outlook and will facilitate “click to call” dialling using Internet Explorer.

Terms of the deal were not disclosed. However, the deal sets up a more vigorous rivalry between Microsoft and Google, which are going after the same messaging market, which is where Microsoft will apply the Teleo technology in order to launch calls from Microsoft’s Messenger services.

Microsoft expects to have a test version of the enhanced product out by the end of the year. Microsoft also is working to integrate Teleo technology into its search engine in order to facilitate click-to-call capabilities from search results.