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Go2Net calls Net2Phone
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October 29, 1999: 2:07 p.m. ET
Deal allows portal users to make Web phone calls; stocks zoom on news
By Staff Writer Michele Masterson
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NEW YORK (CNNfn) - Go2Net Inc. on Friday announced it signed a three-year alliance with Internet telephone provider Net2Phone that allows Go2Net users to make Internet calls using Net2Phone's software, sending shares of both companies higher in midday trading.
In mid-afternoon trading, Go2Net was up 10-13/16 to 69-15/16, while Net2Phone was up 2-3/8 to 54-7/8.
Under terms of the pact, the companies will co-develop a unified messaging center on Go2Net's portal site, enabling private users and businesses to send and receive voice mail, e-mail, faxes and phone calls. Go2Net users will be able to download Net2Phone's PC-to-phone software and place calls via the Web at discounted rates.
Future plans call for Net2Phone (NTOP) to incorporate its Internet protocol (IP) telephone services when Go2Net (GNET) begins providing customized portal offerings to third parties that are distributed via set-top devices, cell phones and PDAs.
The alliance also includes major marketing and promotion of Net2Phone services on Go2Net's network of sites, with a minimum marketing commitment of $5 million per year. The companies will share revenue derived from Net2Phone's services, after Net2Phone has met unspecified targets.
The announcement came on the heels of positive fiscal fourth-quarter earnings that Seattle-based Go2Net (GNET) reported Thursday. Pro-forma earnings were $5.32 million, or 12 cents a share, double what analysts at First Call had expected. Go2Net is 34-percent owned by Paul Allen, co-founder of Microsoft (MSFT).
US Bancorp Piper Jaffray Friday raised its outlook for the company's fiscal first quarter earnings per share to 8 cents from 6 cents. The stock also was upgraded to "strong buy" from "accumulate" by Prudential Securities, which put the 12-month target price at $90 per share.
Prudential analyst Michael Legg told CNNfn.com he was impressed with the company's latest figures.
"They had an excellent fourth quarter and beat my estimates. I think they're well positioned by their broadband initiatives, their placement within Media Metrix' Top 10 Web sites, and a solid management team led by Russell Horowitz. We see the company delivering," Legg said.
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