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Technology Stocks : VocalTec (VOCL) -- Ignore unavailable to you. Want to Upgrade?

To: alan sigler who wrote (942)	12/7/1997 5:09:00 PM
From: Ted Downs	Respond to of 2349

Alan, In response to your questions It seems to me as competition heats up in Voice over IP that eventually the bigger companies with either 1. Create from within. 2. Aquire to get the knowledge. Also,this may be a stupid question but I've seen worse comments before. When a company decides to invest in another company what exactly does that mean? Many companies are developing their own internet telephony software now, but many will never be profitable and will go belly-up. The larger companies such as Lucent and Microsoft already have VOIP and will compete with vocaltec and others. Some will get acquired and I feel that's a real posibility with vocaltec. As far as Deutsche Telecom investing in Vocaltec, I think that move could be made for several reasons such as ; 1. Since they agreed to buy a considerable amount of product an investment would be a good hedge in that they were helping vocaltec's bottom line and perhaps getting something back for it. 2. They were unsure of where VOIP was going so this was another good way to hedge if it takes off. 3. They actually want it as an investment leading to a possible buyout down the road. 4. Vocaltec wanted them to make the investment as part of a deal in offering special product considerations to DT. Regarding #4 it's possible that was the real reason because Vocaltec needed some cash and wasn't able to make a secondary offering at that time anywhere near $21 a share, although there are all kinds of possibilities. However, the investment made by Vocaltec in ITXC which AT&T is also considering or has already made was a step in the right direction and gets the whole VOIP nearer to profitability. The reason VOCLF has been weak I think is also seen in other tech stocks and particularly in stocks that are in developmental stages without earnings. A good example of that would be Iridium which has sold off some recently. Internet Telephony in the rest of the world outside the US is pretty much dominated by Vocaltec. I feel that the savings to users in the international markets with make VOIP work very big in the rest of the world. If you live in Europe chances are you have relatives , friends and business associates somewhere else in the rest of the world. This is where the big growth will be imho. Ted