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ITXC Melds with eFusion

ITXC Corp. this week said it would acquire eFusion Inc. in an all-stock deal estimated to be worth $151 million.

ITXC Corp. operates ITXC.net, a wholesale Internet telephony network that supplies voice over Internet protocol services. Currently 13 of the 14 top U.S. based telecom carriers contract with ITXC to carry international calls over the Net.

The application service provider will add eFusion's voice-enabled applications to its service portfolio.

Mark Winther, IDC analyst, credits ITXC with changing the economy of scale of traditional phone-to-phone calling. Winther said the eFusion deal would help ITXC integrate VoIP services with other PC-based communication services.

"The eFusion services use voice to help web merchants close more sales and integrate voice and voice mail with other PC-based communication," Winther said. "eFusion enhanced services on ITXC.net will allow the companies to combine carrier, ISP, portal, and Web site customers to offer their customers e-calling."

Winther added that e-calling services are less expensive than traditional phone calling services. With e-calling, users may be contacted wherever they travel with a single caller identification, just as e-mail users can be reached anywhere with a single address. E-calling integrates wired and wireless phones, with data devices.

E-calling can also be combined with other forms of Net-based communication like, Web browsing click-to-talk quick-connections or e-mail and integrated messaging.

E-Fusion's current services include "Push to Talk," which voice enables Web sites and to make live human call contact over the Net. Other eFusion products include Internet call waiting, voice mail, and follow-me services as part of a PC-based call management program.

Tom Evslin, ITXC chairman said the combination of ITXC and eFusion should enable it to offer carrier and portal customers a suite of e-calling services.

"Our customers will be able to serve their customers better with integrated messaging, follow-me services, and Push to Talk, which greatly boosts the sales closed by Web sites," Evslin said.

In addition to e-calling technology, ITXC will eventually own the patents on the programming and a direct line to the customers that use it.

Ajit Pendse, eFusion chairman, said the two companies have been working toward the same goal for a long time.

"E-calling is a vision both eFusion and ITXC have been working toward since the early days of voice on the Net," Pendse said. "Combining eFusion's unique services with the reach and quality of ITXC.net is a huge step toward achieving a common goal."

The must obtain the approval of both companies boards and shareholders. Current eFusion shareholders include AT&T Corp., Intel Corp., which was also an early investor in ITXC, Microsoft Corp., and an array of international telecom carriers. The agreement requires that 80 percent of the stock be held at least 180 days after the transaction closes.

When the deal is done, Oregon-based eFusion will become a wholly owned subsidiary of ITXC. Evslin will remain as chairman and chief executive of the merged firms, while eFusion's Pendse serve as an ITXC executive vice president.