LUCENT TO SPIN OFF ITS MICROELECTRONICS GROUP, WARNS OF SLOWER CIRCUIT SALES
Lucent Technologies confirmed plans to spin off its microelectronics business via an Initial Public Offering (IPO) of up to 20% of the new company in Q1 2001.  The remaining shares would be spun off in a stockholder distribution next summer.  The spin off will free the $4 billion per year optoelectronics components and integrated circuits business unit from the strategic conflict it now faces as part of Lucent Technologies.  The new company, which will be named later, already has more than 75% of its sales coming from outside of Lucent.  Its key product lines include digital signal processors (DSPs) for wireless infrastructure, integrated circuits (ICs) for SONET and SDH, wired communications ICs, dial-up modem ICs, system-on-a-chip solutions, high-speed optical modulators, submarine optoelectronics and a range of communications lasers.  The group has invested about $1 billion over the past 18 months in expanding its manufacturing capability.  It has also completed nearly $4 billion in acquisitions (below).  For the most recent quarter, the group's sales rose to $1.809 billion, up 39% over last year.  The new company will be headquartered in Allentown, Pa., and will employ more than 16,000 people in 105 locations worldwide.  http://www.lucent.com/press/0700/000720.cob.html

Separately, Lucent reported quarterly revenue of $8.713 billion for on-going operations, up 18 % over last year.  Net income was $1.007 billion, or $.30 per share, prior to acquisitions and other costs.  The company warned of lower revenue expectations in the coming quarter associated with a faster- than-expected decline in circuit switching sales, which is not expected to be offset as quickly by the ramp-up of newer products; a longer-than-expected, full-volume ramp-up in optical networking; and the substantial reduction of a major long-term foreign project.  http://www.lucent.com/press/0700/000720.coa.html
Lucent Technologies, July 20, 2000

• Consensus estimates for LU were $0.29 p/s
  
• Lucent is also preparing to spin off its Enterprise Networks Group into a new company called Avaya.

MICROSOFT SELECTS NET2PHONE FOR FREE PC-TO-PHONE CALLING VIA MSN MESSENGER
Microsoft will integrate Net2Phone's PC-based client software into its MSN Messenger Service 3.0, a free Internet messaging client.  The service includes a new "Call" button that allows users to place PC-to-PC or PC-to-phone calls to any of their online buddies.  PC-to-PC calls are free to anywhere in the world, and PC-to-phone calls are free for calls to any telephone in the US and Canada.  http://www.net2phone.com/cgi-bin/pagemerge.cgi?outer=press_releases00&inner=07_20_2000
Net2Phone, June 20, 2000

• Microsoft claims more than 18 million regular users of MSN Messenger, with more than 7 million starting to use the service since March 2000.

SBC COMMUNICATIONS REPORTS 399K DSL SUBSCRIBERS
As of June 30, SBC Communications had 399,000 total DSL customers in service, up by 198,000 over the end of Q1.  Dedicated transport revenues increased 35.6 percent to more than $1 billion, while switched transport and application services/data communications solutions, which include applications, network integration services and Internet services, grew 32% and 50.5% respectively compared with the second quarter of 1999.  The company also announced plans to accelerate its entry into local markets outside its traditional territory.  The new agenda calls for entry into nine new markets this year, and a total of 30 new markets by year-end 2001, six months faster than originally planned. http://www.sbc.com/News_Center/Article.html?query_type=article&query=20000720-01
SBC Communications, July 20, 2000

BELLSOUTH REACHES 74,000 DSL CUSTOMERS
As of June 30, BellSouth had 74,000 customers for DSL and other high-speed access products and a total of 788,000 Internet service subscribers. http://www.bellsouthcorp.com/proactive/documents/render/33542.vtml
BellSouth, July 20, 2000

AOL REACHES 23.2 MILLION MEMBERS, COMPUSERVE AT 2.8 MILLION
America Online added 992,000 net new members to its AOL service in Q2, bringing it to 23.2 million total members as of June 30.  Average usage per member per day was 58 minutes during the quarter, compared with 52 minutes for the same time last year. Its CompuServe service added 146,000 members for the quarter, bringing it to 2.8 million.  The company's ICQ service now has 70 million registered users , of which more than 20 million are considered active users.  http://www.corp.aol.com/earningspress.html?
America Online, July 20, 2000

AT&T LAUNCHES LOW-COST, AD-SUBSIDIZED INTERNET SERVICE
AT&T is launching an advertising-supported, Internet dial-up service priced at $4.95 per month.  The service will assign a unique, anonymous ID number to each customer's computer for tracking URLs that are visited.  The tracking will then be used for customized advertising.  AT&T said personally identifiable information, such as e-mail address and phone number will not be linked with the tracking data.  http://www.att.com/press/item/0,1354,3092,00.html
AT&T, July 20, 2000

BLUELIGHT FREE INTERNET SERVICE REACHES 3 MILLION US USERS
Seven months after launching its Totally Free Internet Service, BlueLight.com now has 3 million registered users – making it the fastest growing Internet service in the US.  The company reports sign-up rates often reaching highs of 25,000 a day and 150,000 per week.  To grow the free dial-up service, Bluelight.com is leveraging the distribution and marketing strength of Kmart as well as via an aggressive banner advertising campaign on Yahoo! 
BlueLight.com, July 20, 2000

• BlueLight was formed in 1999 by Kmart, Softbank Venture Capital and Martha Stewart Living Omnimedia.  
  
• On July 18, AltaVista said it has registered more than three million users for its Free Access service in less than one year. 

ALTEON WEBSYSTEMS TO ACQUIRE PHARSALIA TECHNOLOGIES
Alteon WebSystems will acquire Pharsalia Technologies, a start-up developing content delivery products, for $221 million in stock   Pharsalia is developing software products that will leverage Alteon's recently announced Integrated ServiceDirector and Webworking framework.  The company has a team of 28 engineers and is based in Roswell, Georgia.  http://www.alteonwebsystems.com
http://www.pharsalia.com
Alteon WebSystems, July 20, 2000

• Earlier this week, Alteon announced plans to combine Web switching and appliance technologies in an Integrated ServiceDirector (iSD) delivery platform capable of offloading specific compute-intensive functions from servers. The new Alteon iSD products, which include an SSL accelerator that scales to gigabit speeds and an "Akamizer" content device, will perform the processing tasks with long duty-cycles that would otherwise bog down network performance. A stack of iSDs attached to an Alteon Web switch via 10, 100 or 1,000 Mbps links would function as a gigantic virtual application engine. 

AT&T TO OFFER PACKETEER QOS TOOLS IN ITS INTERNET DATA CENTERS
AT&T will integrate Packeteer’s application QoS measurement tools with its Networked Messaging Management, Enterprise Wide Area Networks (WANs) and Custom Hosting capabilities.  The new service offering provides application QoS and service-level management capabilities to AT&T's custom hosting, networked messaging and managed application and outsourcing services. AT&T expects Application Service Providers (ASPs) to be among the first customers.  http://www.att.com/press/item/0,1354,3098,00.html  http://www.packeteer.com
AT&T, July 20, 2000

CONEXANT'S SINGLE-CHIP CABLE MODEM RECEIVES CABLELABS CERTIFICATION
Conexant's single-chip cable modem has received certification from Cable Television Laboratories, paving the way for cable modems to be installed directly into PCs via the Peripheral Component Interconnect (PCI) interface.  In addition to a PCI interface, the Conexant CN9414 chip features an ARM processor to drive its programmable media access control (MAC) layer. The chips are being used in PCI cable modem cards from GVC and Zoom.  http://www.conexant.com
Conexant, July 20, 2000

GIGANET FILES FOR IPO
Giganet Ltd., a developer of broadband wireless equipment, filed SEC registration papers for an IPO.  The company's http://www.giganet.co.il
Giganet, July 20, 2000

• Giganet's FibeAir broadband wireless platform operates across multiple licensed frequencies (18, 23, 26, 28 and 38 GHz), delivering SONET/SDH, ATM, Fast Ethernet and IP at up to 155 Mbps.  The company has commercially deployed systems in 20 countries.  It recently announced plans to offer spectral-efficient 311 and 622 Mbps broadband wireless products.  Giganet is based in Tel Aviv, Israel and is an affiliate of the RAD Group.