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Net2Phone Dials Up Netscape

Internet phone specialist IDT Communications said Wednesday that its Net2Phone brand will be featured on Netscape's browser as part of a multi-year, global distribution deal.

IDT Communications (IDTC) and Mountain View, Calif.-based Netscape (NSCP) agreed to bundle Net2Phone on Netscape Communicator, and to feature the service as a button on the browser's Personal Toolbar.

"When you click on that (button) you will be able to make Internet telephony calls," said IDT Communications Executive Vice President Jonathan Reich. "That's significant considering users will no longer have to download our software. It'll be integrated into the Netscape browsers."

The service will also be integrated into Netscape's Net Center; it'll be plugged in ads on Netscape sites.

Last November, Netscape agreed to be acquired by America Online (AOL) for $4.2 billion. Reich declined to comment on whether IDT will pursue a deal with AOL, the dominant online service with more than 15 million subscribers.

Net2Phone will soon raise its profile with ads in USA Today carrying the theme, "Net2Phone, your online communications company," Reich said.

"With Netscape we've brought the PC to phone communications piece out to the masses," Reich said. Calls will cost as little as 4.9 cents per minute, the company said.

The Netscape deal follows pacts with Yahoo (YHOO) and Excite (XCIT).

Introduced in 1996, Net2Phone was the first service to bridge the Internet with the public switched telephone network.

Shares of IDT Communications gained 1 1/2 to 16 15/16 shortly after the opening bell onWednesday. Netscape added 2 1/8 to 81 5/8.

Net2Phone competitors include VocalTec (VOCLS), RSL Communications (RSLCS), Inter-TEL (INTL) and NetSpeak (NSPK).

Written By Steve Gelsi, CBS MarketWatch