< To: Andrew H (9796 )
From: steve host Tuesday, Jun 22 1999 7:51PM ET
Reply # of 9797
How long will it take for EXCITE/ATHM/ and communications giant ATT combination to offer exactly that - net to phone calls to increase their home site viewing. I have a hunch not too long. >
Couple of points to be made here. First off, EXCITE is already IDT's partner. Secondly, AT&T is at least 5 years and billions of dollars behind the curve on this one. They never took telephony seriously. Now they have to either route their calls through IDT (as they currently do) (just as Sprint does. Or, they can buy IDT. However, if they build their own network it will take 5 years and billions. Lastly, IDT is currently in talks with ATHM and other cable companies.
cbs.marketwatch.com
June 11, 1999 <Picture: [The Wall Street Journal Interactive Edition]>
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Investors Say Net2Phone's Site
Offers Hints About Two Deals
By JASON ANDERS
THE WALL STREET JOURNAL INTERACTIVE EDITION
Message-board users say they've discovered evidence of two partnership deals involving Net2Phone, a company that routes telephone calls over the Internet.
<Picture: Heard on the Net>Net2Phone isn't talking, but at least one of the deals is for real. A spokesman for Sprint confirms that it is testing a service with Net2Phone. Compaq Computer, the other rumored partner, declines to comment.
The online chatter on a Yahoo! Finance (quote.yahoo.com) message board dedicated to Net2Phone's parent, IDT Corp., heated up on Tuesday when a user poking around on Net2Phone's Web site (www.net2phone.com) stumbled on a page titled "Welcome to Compaq -- Net2Phone Asia." Moments later, similar pages had been discovered for Canada, Brazil and Latin America.
Message-board users pounced on the discovery. "PROOF OF AN ALLIANCE!!!!!!" screamed one message. "We'll be at 40 in two months!" wrote another user, predicting the stock price would double.
Just an hour later, with users still excited about the Compaq find, the mood turned to pure frenzy after a participant made another discovery on the Net2Phone Web site: a series of Web pages that detailed a new service from Sprint using Net2Phone's technology.
A spokeswoman for Net2Phone, which has filed to go public, declines to comment on the pages the users found, except to confirm that they are "active" pages and weren't built as tests. She says the pages weren't linked off the Net2Phone main page, and could only be found by users who "knew what they were looking for."
Discovered
The following pages were found by message-board participants. Net2Phone confirms they are "active."
Asia
Brazil
Canada
Latin America
Sprint Basics
A spokesman for Compaq says the computer maker "is not in a position to comment publicly right now concerning Net2Phone."
But Joe Tomkowicz, a spokesman for Sprint, confirms that the telephone company has been quietly testing a service called "Sprint Basics" since April that allows users to place telephone calls over the Internet using Net2Phone's technology.
"We're in a market trial for this product right now, and I really can't say much more than that at this time," says Mr. Tomkowicz. He says Sprint has promoted the service on a very limited basis through banner advertising on Web sites. The trial is scheduled to run through July, but he declines to comment on whether or not the program would be extended.
He also says it is common practice for Sprint to ask companies involved in market trials not to make public comments, but declines to say whether that was the case with Net2Phone.
Net2Phone's main product, from which the company gets its name, lets customers use their computers to place telephone calls over the Internet to a phone anywhere in the world. A customer uses his computer's microphone and speakers to conduct the call. Because the calls are routed over the Internet, and not traditional phone lines, there are significant savings -- calls within the U.S. are 4.9 cents per minute, and most international calls are 10 cents per minute. Conventional phone services, at best, charge about 10 cents a minute for within the U.S. International calls can run up to several dollars a minute.
The service being offered by Sprint, however, is more in line with Net2Phone's newer product, called Net2Phone Direct. No computer is needed. Customers call an access number, and are then connected to any number they wish, just as with traditional phone cards. Again, the difference -- and the source of the savings -- is that the calls are routed through a computer system and over the Internet.
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The discoveries come as message-board users have been frustrated by Net2Phone's public-relations silence ahead of its coming initial public offering. So far, though, shares of parent firm IDT, which is based in Hackensack, N.J., haven't raced on the chatter. IDT closed at 20 11/16 on the Nasdaq Stock Market Thursday, up from 19 1/4 on Monday. No date has been set for the IPO, which was announced last month.
Net2Phone launched its first product, PC2Phone, in August 1996, and became a subsidiary of IDT in October 1997. But consumers were slow to warm to the notion of using their computers to place long-distance telephone calls, and the company has yet to turn a profit. Net2Phone posted a loss of $3.5 million in fiscal 1998 and $2.1 million for the six months ended Jan. 31. It hasn't yet released figures for its quarter ended May 30.
Still, revenues have surged, from $2.7 million for its fiscal year ended July 31, 1997, to approximately $12 million in fiscal 1998. The company reported revenues of $13.2 million for the six months ended Jan. 31. Net2Phone says it serves about 250,000 customers a month, with about 60% of its business coming from outside the U.S.
According to its prospectus, Net2Phone expects its losses to continue for the foreseeable future, pressured by significant increases in marketing and operating expenses over the next several years.
Net2Phone also has a significant reliance on other companies to help route its telephone calls. According to its prospectus, all of the telephone calls made by its customers are connected at least in part through facilities leased from telephone companies and others.
The filings also say that Net2Phone's success depends on its ability to strike marketing deals with other companies -- which includes computer makers and telephone companies.
The company already has a deal with Packard Bell NEC to bundle its Net2Phone software with computers sold in Europe, but so far hasn't been able to land a similar deal for the U.S. Likewise, the Sprint trial is Net2Phone's first partnership with a U.S. phone company. Net2Phone has agreements with a handful of telecommunications companies abroad. |
