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Technology Stocks : IDT *(idtc) following this new issue?* -- Ignore unavailable to you. Want to Upgrade?

To: 613 who wrote (21343)	8/1/2000 9:42:52 AM
From: Doug F	Read Replies (2) \| Respond to of 30916

613 I agree that Net2Phone may be suffering due to recurring rev issues. There is no doubt that LD by itself over any medium, is not a great business. The real issue here, IMO, is whether NTOP can transition to a technology licensing business model. I agree that intl margins will fall, but they won't plummet - NTOP have done a great job of building a global brand - i.e. they have many customers outside the US making intl calls. It would take competition a long while to grab market share here, and it would be pretty costly. I think the lynch pin in the business model, is growing licensing revenues using a QCOM model. It's really a make-or-break the company issue, imho. To succeed using this strategy, you must have usage ubiquity. I think that's a main driver of the IM agreements. Think of Netscape. Give away the browser, charge for the server. Same with NTOP. Give away the software, charge for the gateways. They need to have everyone using the front end of the service, to be able to license the "guts." They may bump heads with Cisco, but as I understand it, their technology operates at an OSI level above Cisco's area of focus. Looking at the latest 10Q, for period ended April 30th, product and licensing revenues have increased to 10% of total revs, vs. a negligible level in the year ago period. So, they're beginning to execute. Additionally, NTOP just closed a $45m acquisition of an IP telephony technology shop (see www.aplio.com). This should enhance product and licensing revenue. So, I think NTOP is going for the home run - i.e. being the industry standard. This is either going to really, really work, or it'll become another chump-change also-ran service provider. What gives me hope is that NTOP has MSFT on board (for now). Remember Netscape - didn't do a deal with the devil and got crushed, despite having the early lead. Hopefully, this will be different. We'll see. FWIW, I'm invested in IDT, not NTOP. I think it is a magnitude above NTOP in terms of risk/reward profile. Anyway, my 2c. Should probably go do some real work for a change :)