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.

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