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Pioneering VoIP Company On Deathbed |
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Written by Adam Gosling
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Monday, 01 August 2005 |
Israeli company VocalTec was once a pioneer in the VoIP field, however, deluged by the fast pace of competitive development it seems there's no longer any use for the company.
VocalTec which this story credits with starting the VoIP revolution has cut two thirds of its staff and put itself up for sale.
According to the story, VocalTec cannot keep up with the fast pace of IP Telephony development despite a US$1 million bridge loan from shareholder Deutsche Telekom.
Suffering from cash burn because it hasn’t come up with any thing new for years, says the article, the company got down to its last US$1.7 million before giving up.
Its cash burn rate for the last quarter was US$3.3 million.
By cutting its staffing levels from 100 to 35 the cmpay may be able to last till September says the story.
Elon Ganor, VocalTec's chairman and CEO, said; “We are involved in discussions regarding several potential M&A transactions and are simultaneously in the preliminary due diligence stage of a potential business combination with another company. In addition, we are also considering a bidding process."
In contrast to its glory days in 2000 when it reported sales of US$37.5 million and a net profit of US$28.8 million, this most recent quarter saw a net loss was US$2.4 million in the most recent quarter. Overall, the company over the years has lost a total of $150 million, compared to capital investment and an IPO of $120 million. Its share price has fallen from a high of US$53.25 to just US$0.54 cents.
The story says VocalTec is credited with being the first to prove that IP telephony worked and in 1996 it announced it was working with Dialogic Corporation (now an Intel subsidiary) to produce the first IP telephony gateway.
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