AOL In Talks For Large Net2Phone Stake?

America Online may be on the verge of acquiring a 48 percent equity share in Net2Phone, a deal that would give AOL a majority stake in the Internet telephone company.

Net2Phone spokeswoman Sarah Hofstetter told Newsbytes today,
"The company is not commenting on" reports by CNBC that a $1.75 billion
stock and cash deal would involve the sale of 25 million shares held by
IDT
Corp. Citing sources close to negotiations, CNBC said the deal could
exceed
$70 per Net2Phone share. An agreement could be announced this week,
the financial network said.

Spokesmen for AOL and IDT cited corporate policy of not responding to
market speculation and had no comment on the reports. AOL, with a
5 percent stake in Net2Phone acquired last year, would have a
58 percent holding on Net2Phone if the transaction takes place.

Net2Phone enables long distance phone calls via the Internet from
computers, telephones or fax machines at reduced rates. The company,
serving 325,000 customers, is currently offering - for $3 - penny-per-
minute PC-to-phone calls, 100 minutes of free talk time and a free
headset ($5.95 shipping).

Acquiring Net2Phone would fit AOL's strategy to give phone call access
to its customers via the broadband network it will take over in the
Time Warner deal.

America Online can be found on the Web at http://www.aol.com.

Net2Phone is at http://www.net2phone.com.

Reported by Newsbytes.com, http://www.newsbytes.com.