BT, which made a splash last month with a US$19-billion next-generation network contract, hopes to gain even more attention with a new phone called BT Fusion that acts as a regular mobile phone when the user is out of the house, then "seamlessly" switches over to the carrier's IP network when the user returns home. The switch is done through an access hub, which also acts as a Wi-Fi router to connect PCs, game consoles and printers. For carriers with wireless and wireline networks, the idea of a converged phone service is compelling because it will make their wireless networks more efficient and, hopefully, reduce the need to make investments to expand the system even as more consumers come on board. In Canada, Rogers has been talking about this kind of network for months but with the integration of Microcell Telecommunications Inc. and the launch of cable telephony next month, it has not been a high strategic priority.

It has sure been a busy day for Yahoo's M&A folks amid news the company has also acquired blo.gs (in addition to the earlier deal for Dialpad). Blo.gs is a Web-based blog aggregating tool with a cool blogrolling feature. I can't provide too much more context on how Blo.gs fits into the RSS reader/aggregator market but what's more interesting is the recent moves made by Yahoo to position itself in new, emerging market. The purchase of Dialpad accelerates Yahoo's plans to enter the VOIP market, while acquiring Flickr gave Yahoo a strong position in the photo-blogging world. Yahoo CEO Terry Semel deserves a lot of credit for helping Yahoo get its mojo back when it appeared to be stalled strategically after the dot-com bubble burst. It wasn't that long ago critics were carping about Yahoo's missed opportunity when it failed to buy eBay and/or Disney. Today, Yahoo has emerged as the leading new media company while AOL attempts to re-invent itself within the Time-Warner empire. The bottom line is the wheeling and dealing in the VOIP and blog markets appears to be off to a running start. I suspect there will be a lot of add-on deals as large companies snap up interesting start-ups. See my posting yesterday for more context.

I guess we can eliminate Skype from Yahoo's M&A shopping list amid reports Yahoo has acquired Dialpad for an undisclosed amount. Strategically, this means Yahoo will be able to add telephone features and bill capability into its IM client. This will make Yahoo a much bigger force in the VOIP market and put it in direct competition with Skype. At the same time, the deal will likely put pressure on Microsoft and AOL to level the playing field. And as the market accelerates, Google will also have to something significant if it really is serious about the telephony/VOIP market. This should put even more focus on Skypes's future given the recent flurry of Yahoo-Skype marriage speculation. ZDNet's Russell Shaw makes a good point about what acquiring Dialpad means to Yahoo's partnership with SBC. Rather than putting Yahoo in competition with SBC with a low-cost VOIP service, Shaw believes it will help both parties by encouraging more consumers to buy SBC's broadband service.
By the way, kudos to Lightreading.com for referencing the work done by Om Malik in getting a scoop on the Yahoo-Dialpad deal, and Andy Abramson for providing some quick-off-the-mark context.