Net2Phone Debuts New Ways to Yap

SAN FRANCISCO (04/11/2000) - Yapping long distance on the phone with friends just got cheaper, thanks to new Net2Phone telephone appliances that let you talk over the Internet without a computer.

On Tuesday, Net2Phone Inc., a provider of voice-enhanced Internet communications, launches a line of telephones that route calls over its voice-over-Internet-protocol network.

Net2Phone says its new products will be the first of many Internet telephone appliances in its new "Your Alternative Phone" product line. The first Yap line of phones will be available in early May at major computer retailers nationwide and eventually through Net2Phone's consumer Web site, Yap.com.

Go Ahead, Yap It Up

The $55 Yap Phone plugs into your computer's Universal Serial Bus Port and, used with Net2Phone client software, allows you to make calls anywhere in the United States for 1 cent a minute.

Net2Phone also plans to introduce a $159 Yap Jack device that allows you to use any telephone to make an Internet phone call. The Yap Jack connects to a normal phone line and to any standard telephone. The Yap Jack will let you choose between your regular long-distance service and Net2Phone by pressing an Internet button on the device. A computer is not needed to place a call.

The Yap Jack contains a 56-kilobits-per-second modem that links you first to an Internet service provider and then routes the call over the Internet to any telephone at 2.9 cents per minute within the United States. There is no charge for telephone calls between two Yap Jack users.

Net2Phone also officially launches its $45 Yap Headset, already available at some retailers. The headset plugs into a PC sound card and lets you make hands-free telephone calls over the Internet. The Yap Headset comes with Net2Phone client software and has a 1-cent-a-minute rate for calls within the United States. International rates begin at about 4 cents a minute.

Talk Is Cheap

Internet calls cost less than conventional calls because they are routed over the public Internet network in packets that don't tie up a dedicated line, as traditional circuit-switched calls do. Quality issues plague Internet calls, however, because of problems with reassembling those packets of information.

Net2Phone service was launched in 1996 and has grown about 25 percent every quarter, exceeding similar services Deltathree.com and Phonefree.com and gaining about 40 percent market share, according to a Net2Phone spokesperson.

It's currently routing an average of 200,000 calls a day. And while you'd think that traditional phone companies would disfavor a service like Net2Phone, evidently the opposite is true. AT&T Corp. has invested heavily in Net2Phone, now owning more than 30 percent of its shares.

Last week Yahoo Inc. also invested in Net2Phone, pushing Internet telephony closer to the mainstream. While Yahoo holds only a 5 percent stake, it offers Net2Phone the ability to directly service Yahoo's 120 million users. Net2Phone is integrated into Yahoo's People Search section, where users can look up phone numbers. Once they find the listed number, they can click on it and call directly from their PCs to that phone number using Net2Phone.

Net2Phone provides the Click2Talk service used by many electronic-commerce sites to allow customers to talk to a live person while browsing the site.

Being first to market in the nascent voice-over-Internet-protocol space has bolstered Net2Phone, analysts say. "They've got a three-year jump on the competition," says Mark Winther, an analyst with IDC.

Net2Phone attributes its achievements to an aggressive rollout of over 500 global Internet protocol gateways. These gateways are critical links in any voice-over-Internet-protocol network that connects voice that travels over the Internet with traditional circuit-and-switch telephone networks.

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