Dow Jones Newswires
Net2Phone Up 27% After Co. Inks Deal With NBC Web Sites
By Christina Cheddar
NEW YORK -- Net2Phone Inc. (NTOP) continued to show investors that it
knows how to close a deal.
Over the weekend, the Hackensack, N.J., Internet telephony company
signed a distribution agreement with NBC's Snap.com, NBC.com and NBC
Interactive Neighborhood.
The deal will give NBC, the broadcasting arm of General Electric Co.
(GE), an undisclosed equity stake in Net2Phone and the right to name a
member to Net2Phone's board.
Net2Phone, a former IDT Corp. (IDTC) unit, had previously inked deals
with industry leaders International Business Machines Corp. (IBM),
America Online Inc. (AOL), Yahoo! Inc. (YHOO), Excite@Home (ATHM) and
Infospace.com Inc. (INSP).
In the latest multiyear agreements, Net2Phone's
personal-computer-to-phone service will be featured at Snap.com's Web
site. From Snap.com, users can search phone listings and click instantly
to dial any number. Similar links will be displayed at NBC.com and NBC
Interactive Neighborhood.
The advantage of the service is that it makes calling less expensive.
While MCI WorldCom Inc. (WCOM) created a stir earlier Monday with its
announcement of a 5-cent-a-minute flat-rate calling plan for weekend and
week nights, Net2Phone charges less than 5 cents a minute for U.S. calls
made with its service.
"Within the Internet telephony space, Net2Phone is in contention for the
No. 1 slot based on the number of minutes of use on their networks,"
said Hilary Mine, executive vice president of Probe Research, a telecom
and Internet Protocol industry consulting firm.
Mine said Net2Phone's recent agreements provide it with "a lot of
eyeballs."
"Technology is never the key to success," said Mine. Instead, she
believes success in the sector requires a combination of technology,
marketing, vision and momentum.
Mine said Net2Phone has done a "spectacular" job gaining exposure among
PC users.
Net2Phone shares were recently up 4 1/4, or 25.8%, to 20 3/4 on Nasdaq
volume of 3 million shares, which compares with average daily turnover
of 3.9 million.
Officials from Net2Phone, which completed its initial offering at the
end of July, wouldn't comment, citing its post-offering "quiet" period.
The agreement Net2Phone signed with NBC also is seen as very consistent
with Net2Phone's strategy, according to Mark Winther, International Data
Corp.'s telecommunication group vice president.
"Net2Phone wants to bring live voice to the net in any way possible,"
said Winther.
Net2Phone's technology can allow a range of voice-enabled Web
activities, said Winther. The uses include phone calls over the Internet
and real-time, private chat. Winther also foresees applications where
electronic commerce companies will be able to have live conversations
with their customers.
"As an e-commerce company, the last thing you want is an abandoned
shopping cart," he said. Winther believes the voice of a live sales
representative can help to close transactions that may have ended
without a sale.
Probe Research's Mine said the variety of applications for voice over
the Internet is the compelling long-term trend for the technology.
Net2Phone's focus on the PC-to-phone market will give them an advantage,
.
"It's the Pepsi approach," said Mine. "They're after the next
generation."
-Christina Cheddar; 201-938-5400
christina.cheddar@dowjones.com
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