Anyone see this press release. Notice at the bottom about Lucent and Cisco need for software for IP.
BUSINESSWEEK ONLINE : MARCH 8, 1999 ISSUE
INSIDE WALL STREET
Will Motorola Speak to NetSpeak?
For a small company, NetSpeak (NSPK) hobnobs with some telecom biggies, including
Motorola, which has accumulated a 32% stake. NetSpeak's claim to fame, says Robert
Goldman of New York investment firm Josephthal, is its call-agent technology, which
has been integrated in Motorola's wireless and wire-line technology. One NetSpeak
product lets customers talk to a live service agent while they are online.
NetSpeak stock hit 32 in April, 1998, but started to skid when analysts noted that
competition in the Internet telephone industry was intensifying. The stock dropped to
around 5 in October. It has since rallied, closing at nearly 13 on Feb. 23. In the fourth
quarter, a big chunk of NetSpeak's sales were to Motorola. But NetSpeak has yet to
make money.
There is speculation that Motorola may expand its stake in NetSpeak or make an offer
for the whole company. Motorola paid about 30 a share last year when it raised its
NetSpeak holdings from 15% to 32%. ''If Motorola really has its eye on NetSpeak, this
is the time to move--when it's stock is still way down,'' says one California money
manager.
Goldman thinks Motorola will need to buy NetSpeak sooner or later for its Net
telephony technology. At a recent cable show, Motorola introduced its Vanguard
Gateway platform that integrates NetSpeak's technologies to provide Internet routing of
phone calls. Motorola makes the hardware and NetSpeak provides the software to
deliver voice and data over cable modems, says Goldman.
He believes that, as new uses for NetSpeak software are deployed, the company may
seek alliances with other hardware makers, such as Lucent Technologies or Cisco
Systems. These two are leaders, he notes, in making Net telephony gear, but they lack
software components required to deliver ''a full solution.'' Motorola's George Grimsrud
declined comment, and NetSpeak CFO John Staten said the company did not comment
on market rumors.
BY GENE G. MARCIAL |
