Net2Phone makes equity investment in WebDialogs

Hackensack, NJ and Billerica, MA - February 7, 2000 --- Net2Phone Inc. (NASDAQ: NTOP) and WebDialogs today announced an agreement to jointly market voice-enabled e-commerce solutions to businesses worldwide.

The new e-commerce offering will include a unique service-based model that will allow sales and support agents to enhance the e-commerce experience and also have the opportunity to upsell and cross-sell products to further increase revenues as well as capture abandoned sales. According to a survey by BizRate.com and NPD Group, 75 percent of online consumers abandon shopping carts.

With this new combined solution, agents can use collaborative browsing to push web pages to e-shoppers highlighting new products or other related information, and can converse simultaneously in real-time using Net2Phone's award-winning Voice over IP service, thereby enhancing the online shopping experience. The e-commerce solutions will be jointly marketed to enterprises, portals, service providers, system integrators, online directories, and call centers worldwide.

WebDialogs will route all voice traffic over Net2Phone's network, and Net2Phone will collocate WebDialogs' e-commerce equipment in its points of presence worldwide.

Additionally, Net2Phone has invested $10 million in WebDialogs, which represents a significant minority investment, further demonstrating the Company's commitment to voice-enabling the e-commerce experience. This is the first of what is expected to be a series of investments and partnerships to further the Company's e-commerce initiatives.

This strategic investment represents a progressive move within Net2Phone to offer robust e-commerce applications to call centers worldwide as well as leverage current relationships to promote easier ways to complete transactions online. The combined solution uses a unique ASP model that allows businesses of all sizes to easily offer such enhanced solutions to their customers with lower overhead and ongoing costs.

Both Net2Phone and WebDialogs have been offering valuable e-commerce programs to e-tailers and portals such as 800-FLOWERS (NASDAQ: FLWS), Infospace (NASDAQ: INSP), Go2Net (NASDAQ: GNET), Lands' End (NYSE: LE), PAC-WEST (NASDAQ: PACW), Interliant (NASDAQ: INIT), and 3COM (NASDAQ: COMS). The combined product offering presents a more powerful and integrated approach to e-commerce.

"Net2Phone recognizes the potential of the Internet as a powerful medium for personal communications," said Lou Guercia, CEO of WebDialogs. "Together, WebDialogs and Net2Phone will bring to market a rich set of interaction applications that will revolutionize the way businesses and their customers, as well as other Web-based communities communicate and interact. Net2Phone's infrastructure, IP telephony technology and deep relationships with some of the leading Internet sites, coupled with WebDialogs' collaboration engine, will create the next wave in Web Interaction."

"The Net2Phone/WebDialogs combination brings the proven customer interaction of the brick-and-mortar shopping relationship directly to the web," said David Greenblatt, Chief Operating Officer of Net2Phone. "Using our complementary technologies, equipment, and services, we can help e-commerce vendors sell more products more effectively and turn browsers into buyers."

Net2Phone is a leading provider of voice-enhanced Internet communications services to individuals and businesses worldwide. Net2Phone enables people to place low-cost high quality calls from their computer, telephone, or fax machine to any telephone or fax machine in the world. Net2Phone develops and markets technology and services for IP voice and e-commerce solutions for the web and other IP networks. For more information about Net2Phone's products and services, please visit www.net2phone.com.

WebDialogs, based in Billerica, MA, was founded in October 1997 with the objective to revolutionize customer-to-business interaction over the Internet. As the leading provider of web interaction technology and services, WebDialogs' solutions create a collaborative environment for web businesses and visitors to interact live and exchange information over the Internet. The service facilitates customer acquisition, e-commerce transactions, customer service and support over the Internet. Web Dialogs offers an effective customer relationship tool for e-businesses that understand the value of human interaction with customers. The technology is offered as a service to Internet merchants and other customer-oriented web sites through leading Service Providers.

WebDialogs is a trademark of WebDialogs, Inc. in the United States and/or other countries. Other product and company names mentioned herein may be trademarks of their respective owners.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, among other things, Net2Phone's expected operating performance for the three months ending January 31, 2000 and thereafter. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainty of financial estimates and projections, the competitive environment for Internet telephony, changes of rates of all related telco rates and services, legislation that may affect the Internet telephony industry, and Net2Phone's ability to operate the services described on a large scale commercial level. The forward-looking statements are made as of the date of this press release, and Net2Phone assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth herein and the other information set forth from time to time in Net2Phone's reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.