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Mail.com Gets a Makeover; Sells Consumer Unit

New York-based messaging services firm Mail.com has sold its consumer e-mail unit and changed its name to EasyLink Services Corp., a move signaling a shift from consumer to B2B offerings.

In a deal valued at approximately $3.5 million, the company sold its consumer e-mail business to New Jersey-based Internet telephony play Net2Phone Inc..

For $3 million in cash and $500,000 subject to certain milestones, Net2Phone has acquired approximately five million active users. Net2Phone also purchased the rights to Mail.com's relationships with Web site partners. In addition, Net2Phone would pay Mail.com for the hosting of consumer mailboxes for at least one year.

Net2Phone will also gain rights to provide highly targeted e-mail-based advertising and permission marketing solutions to advertisers as well as the rights to provide e-mail services directly to consumers through partnerships with other Web sites and at the www.mail.com domain," the company said.

Following the transaction, Mail.com changed its corporate name to EasyLink Services Corp. and announced plans to "focus exclusively" on outsourced messaging services. As of Tuesday, the company's ticker symbol on the Nasdaq exchange will be changed to EASY.

The corporate name change follows Mail.com's $84 million acquisition of Swift Telecommunications, a transaction that included AT&T's EasyLink subsidiary. In a complex deal, Mail.com gave Swift $14 million as a loan to fund the company's acquisition of EasyLink from AT&T. Upon completion of the acquisition, Mail.com would assume a $35 million promissory note issued to AT&T. That loan is secured by Swift and EasyLink assets.

Adopting the EasyLink name and brand identity is a logical next step in our strategy to focus exclusively on outsourced messaging services, the company's CEO Thomas Murawski said.

"A lot of time and resources have been invested in building recognition for the EasyLink Services brand that stands for quality and reliability on a global basis, and we intend to capitalize on that investment. Additionally, over 75 percent of our customers are already familiar with the EasyLink brand," he added.