<PAGE>
                                                                   EXHIBIT 10.23

                              EMPLOYMENT AGREEMENT


         This EMPLOYMENT AGREEMENT is made effective as of August 1, 2003 (this
"Agreement"), between Net2Phone, Inc., a Delaware corporation (the "Company")
and Stephen M. Greenberg (the "Executive").


                              W I T N E S S E T H:

         WHEREAS, Net2Phone and the Executive are parties to an existing
employment agreement between them dated July 31, 2000 ("Existing Agreement")
which term is scheduled to expire July 31, 2003, and

         WHEREAS, the Company wishes to assure itself of the continued services
of the Executive and the Executive and the Company are willing to continue such
agreement to provide for the continuation of Executive's employment by Company,
without interruption, upon the terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
covenant and agree as follows:

         1. Employment

         Subject to the approval by the Company's Board of Directors (the
"Board") (it being understood that if the Board does not approve this Agreement,
it shall be of no force and effect and shall not be a valid obligation of the
Company), the Company hereby agrees to continue the employment of the Executive,
and the Executive hereby agrees to accept such continued employment with the
Company, without interruption, on and subject to the terms and conditions of
this Agreement.

         2. Term

         Unless earlier terminated pursuant to Section 5 hereof, the period of
this Agreement and the Executive's continued employment hereunder (the
"Agreement Term") shall commence as of the date hereof, (the "Effective Date"),
and shall expire on the third anniversary of the Effective Date; provided,
however, that the Agreement Term shall be automatically extended for an
additional year on the third anniversary of the Effective Date and on each
anniversary of the Effective Date thereafter (each an "Extension Date"), unless
written notice of non-extension is provided by either party to the other party
at least ninety (90) days prior to such anniversary.

         3. Position, Authority and Responsibilities

         (a) The Executive shall serve as, and with the title, office and
authority of, Vice Chairman and/or Chief Executive Officer of the Company, as
desired by the Board, and shall report directly to the Board, it being
understood that the Executive shall serve in both or either capacities, as
desired by the Board and that if the Board desires the Executive to serve in one
capacity and not the other, it shall not constitute Good Reason for purposes of
paragraph 5(c).

<PAGE>

         (b) The Executive shall have all of the powers, authority, duties and
responsibilities usually incident to the position(s) cited above and such duties
consistent with such position(s) as may be assigned from time to time by the
Board.

         (c) The Executive agrees to devote substantially all of his business
time, efforts and skills to the performance of his duties and responsibilities
under this Agreement; provided, however, that nothing in this Agreement shall
preclude the Executive from (i) serving on corporate, civic or charitable boards
or committees, (ii) delivering lectures, fulfilling speaking engagements or
teaching at educational institutions, (iii) managing his personal investments,
and/or (iv) serving as an advisor to senior management of IDT Corporation, from
time to time, provided that in any such case that such activities do not
materially interfere with the Executive's performance of his duties and
responsibilities hereunder and do not violate the provisions of Section 10
hereof.

         (d) The Executive shall perform his duties at the principal offices of
the Company located in Newark, New Jersey, but from time to time the Executive
may be required to travel to other locations in the proper conduct of his
responsibilities under this Agreement.

         (e) With respect to all regular elections of directors during the
Agreement Term, the Company shall use good faith efforts to nominate and elect
Executive to serve as a member of the Board. Upon termination of the Agreement
Term, Executive shall resign as an officer, director, or any other capacity, of
the Company and its subsidiaries, as requested by the Company.

         4. Compensation

         In consideration of the services rendered by the Executive during the
Agreement Term, the Company shall pay or provide the Executive the amounts and
benefits set forth below.

         (a) Salary. The Company shall pay the Executive an initial annual base
salary (the "Base Salary") of at least four hundred thousand ($400,000) dollars.
The Executive's Base Salary shall be paid in arrears in substantially equal
installments at monthly or more frequent intervals, in accordance with the
normal payroll practices of the Company. The Executive's Base Salary shall be
reviewed at least annually by the Board for consideration of appropriate merit
increases and, once established, the Base Salary shall not be decreased during
the Agreement Term.

         (b) Annual Bonus. The Company shall provide the Executive with an
opportunity to earn an annual bonus (the "Annual Bonus") equal to at least fifty
(50%) percent of the Base Salary for each fiscal year during the Agreement Term
beginning with the 2004 fiscal year pursuant to a bonus plan to be established
by the Company. The Annual Bonus, if any, shall be paid to the Executive in the
first regular pay period of the Company that occurs after the first fiscal
quarter of the year that immediately follows the year in which the Annual Bonus
was earned.

                                       2
<PAGE>

         (c) Equity Incentives. Except as provided in this Agreement, the
treatment of options to purchase shares of the Common Stock of the Company
("Common Stock") granted to the Executive prior to the Effective Date under the
Company's stock incentive plan shall be governed by the applicable stock option
agreements. Executive shall be eligible, from time to time, to receive awards of
stock options or other equity incentives, as determined by the Board.

         (d) Employee Benefits. The Executive shall be entitled to participate
in all employee benefit plans, programs, practices or other arrangements of the
Company in which other senior executives of the Company are generally eligible
to participate from time to time, including, without limitation, any qualified
or non-qualified pension, profit sharing and savings plans, any death benefit
and disability benefit plans, and any medical, dental, health and welfare plans,
except to the extent that a separate arrangement is implemented for the
Executive on terms no less favorable than as provided to the other senior
executives agreed to by the Executive that is intended to replace any such
general arrangement. Without limiting the generality of the foregoing, (i) the
Company shall continue to provide the Executive with life insurance coverage
with a death benefit that is not less than the amount as is in effect as of the
Effective Date and (ii) the Company shall provide the executive with disability
insurance coverage consistent with the disability insurance coverage provided to
senior executives of other companies in the same industry as the Company.

         (e) Fringe Benefits and Perquisites. The Executive shall be entitled to
all fringe benefits and perquisites that are generally made available to senior
executives of the Company from time to time on the same basis as is made
available to such other executives. Without limiting the generality of the
foregoing, the Company shall provide the Executive with the following:

         (i) executive offices and support staff appropriate to the Executive's
position;

         (ii) prompt reimbursement of all reasonable travel and other business
expenses and disbursements incurred by the Executive in the performance of his
duties under this Agreement in accordance with the Company's normal practices
and procedures, including professional association dues upon proper accounting
therefor;

         (iii) paid vacation during each calendar year, to be taken in an amount
equal to and in accordance with the Company's vacation policy for senior
executives;

         (iv) an automobile allowance consistent with the automobile allowance
policy for the Company's senior executive officers; and

                                       3
<PAGE>

         (v) such other fringe benefits as the Executive and the Board may
mutually agree from time to time.

         5. Termination of Employment

         The Agreement Term and the Executive's employment hereunder shall be
terminated upon the happening of any of the following events:

         (a) Termination for Cause. The Company may terminate the Agreement Term
and the Executive's employment hereunder for Cause. For purposes of this
Agreement, "Cause" shall mean:

         (i) conviction of the Executive, by a court of competent jurisdiction,
    of, or Executive's plea of guilty or nolo contendere to, a felony under the
    laws of the United States or any state thereof;

         (ii) misappropriation by the Executive of the Company's funds; or

         (iii) the commission by the Executive of an act of proven fraud with
    respect to the Company.

         Notwithstanding the foregoing, in no event shall the Company be
considered to have terminated the Executive's employment for "Cause" unless and
until (i) the Executive receives written notice from the Board identifying in
reasonable detail the acts or omissions constituting such "Cause" and the
provision of this Agreement relied upon by the Company for such termination and
(ii) such acts or omissions are not cured by the Executive within thirty (30)
days of the Executive's receipt of such notice.

         (b) Termination other than for Cause. The Board shall have the right to
terminate the Agreement Term and the Executive's employment hereunder for any
reason at any time, including for any reason that does not constitute Cause,
subject to the consequences of such termination as set forth in this Agreement.

         (c) Resignation for Good Reason. The Executive may voluntarily
terminate the Agreement Term and his employment hereunder for Good Reason. For
purposes of this Agreement, "Good Reason" shall mean:

         (i) any action by the Company that results in a diminution of the
    Executive's authority or responsibilities;

         (ii) any adverse modification of the Executive's positions, titles or
    reporting relationships;

         (iii) any failure by the Company to comply with the compensation and
    benefits provisions of Section 4 hereof or any other material breach of this
    Agreement by the Company;

                                       4
<PAGE>

         (iv) the relocation, without the Executive's written consent, of the
    Executive's principal office from Newark, New Jersey; or

         (v) any failure by the Company to obtain an assumption of this
    Agreement by a successor corporation as required under Section 11(a) hereof.

         In no event shall the Executive be considered to have terminated his
employment for "Good Reason" unless and until (i) the Company receives written
notice from the Executive identifying in reasonable detail the acts or omissions
constituting such "Good Reason" and the provision of this Agreement relied upon
by the Executive for such termination, and (ii) such acts or omissions are not
cured by the Company within thirty (30) days of the Company's receipt of such
notice.

         (d) Resignation other than for Good Reason. The Executive may
voluntarily terminate the Agreement Term and his employment hereunder at any
time for any reason, including for any reason that does not constitute Good
Reason by giving the Company 30-days advance written notice of such termination.

         (e) Disability. The Company may terminate the Agreement Term and the
Executive's employment hereunder upon the Executive's Disability. For purposes
of this Agreement, "Disability" shall mean the inability of the Executive to
perform his duties to the Company on account of physical or mental illness for a
period of six (6) consecutive full months, or for a period of nine (9) full
months during any 18-month period. The Executive's employment shall terminate in
such case on the last day of the applicable period following written notice by
the Company of the election to terminate the Executive's employment due to the
Executive's Disability. Notwithstanding the foregoing, in no event shall the
Executive be terminated by reason of Disability unless the Executive is eligible
to begin receiving long-term disability benefits from a Company-sponsored
long-term disability plan.

         (f) Death. The Agreement Term and the Executive's employment hereunder
shall terminate upon his death.

         6. Compensation Upon Termination of Employment

         Notwithstanding any provision of this Agreement to the contrary, in the
event the Agreement Term and the Executive's employment by the Company is
terminated, the Executive shall be entitled to the compensation and severance
benefits set forth below:

         (a) Resignation for Good Reason; Termination without Cause. In the
event the Agreement Term and the Executive's employment hereunder is terminated
by the Executive for Good Reason or by the Company for any reason other than for
Cause, Disability or death, the Company shall pay to the Executive and provide
him with the following:

                                       5
<PAGE>

         (i) Severance Payment. The Company shall continue to pay the Executive,
his then current Base Salary, in accordance with the Company's general payroll
practice, for the two (2) years following such termination. In addition, during
such two (2) year period the Executive shall be entitled to receive two (2)
payments, at the time and in a manner consistent with the Company's payment of
annual bonuses, of an amount equal to the Executive's then-current Annual Bonus
percentage under Section 4(b) hereof, multiplied by his then-current Base Salary
if and only if such bonus would have been earned under the plan in place
immediately prior to the Executive's termination.

         (ii) Accrued Rights. The Company shall pay the Executive a lump-sum
cash amount, within ten (10) days of the date of termination, equal to the sum
of (A) his earned but unpaid Base Salary through the date of termination, (B)
any earned but unpaid Annual Bonus for any completed fiscal year, and (C) any
unreimbursed business expenses or other amounts due to the Executive from the
Company as of the date of termination. In addition, the Company shall provide to
the Executive all payments, rights and benefits due as of the date of
termination under the terms of the Company's compensation or benefit plans,
programs or awards (together with the lump-sum payment, the "Accrued Rights").

         (iii) Bonus Rights. The Company shall pay the Executive, within ten
(10) days of the date of termination, a lump-sum cash amount equal to a pro rata
portion of the Annual Bonus for any partial fiscal year of service through the
date of termination (the "Bonus Rights").

         (iv) Continued Benefits. Subject to Section 8 hereof, for a two-year
period following the date of termination, the Company shall continue to provide
the Executive and his eligible dependents, at its sole cost, with the medical,
dental, disability and life insurance coverages ("Welfare Benefits") that were
provided to the Executive immediately prior to termination of employment.

         (v) Stock Options. Notwithstanding the provisions of any stock
incentive plan or award agreement between the Company and the Executive to the
contrary, (i) 100% of the options to purchase Common Stock which are not fully
vested and exercisable as of the date of termination shall become fully vested
and exercisable and (ii) the period during which options shall remain
exercisable shall be extended until the second anniversary of the date of
termination. All such award agreements shall be amended by the Company and the
Executive to reflect the foregoing provision.

         (vi) Life and Disability Insurance. The Company shall fully fund the
life insurance and disability policies described in Section 4(d) hereof.

         (vii) Car Allowance. Until the second anniversary of the date of
termination, the Company shall continue to provide the Executive with the
automobile allowance described in Section 4(e)(iv) hereof.

         (b) Resignation without Good Reason; Termination for Cause. In the
event the Executive voluntarily terminates the Agreement Term and his employment
hereunder other than for Good Reason, or in the event the Agreement Term and the
Executive's employment hereunder is terminated by the Company for Cause, the
Company shall pay and provide to the Executive all Accrued Rights and Bonus
Rights and the Executive shall retain any rights that he has pursuant to any
stock option agreement with the Company in accordance with the terms thereof.

                                       6
<PAGE>

         (c) Disability; Death. In the event the Agreement Term and the
Executive's employment hereunder is terminated by reason of the Executive's
Disability or death, the Company shall pay the Executive (or his legal
representative) and provide him with the following:

         (i) Severance Payment. The Company shall continue to pay the Executive,
his then current Base Salary, in accordance with the Company's general payroll
practices, for the one-year period following the date of such termination. In
addition, during such one-year period the Executive shall be entitled to receive
one (1) payment, at the time and in a manner consistent with the Company's
payment of annual bonuses, of an amount equal to the Executive's then-current
Annual Bonus percentage under Section 4(b) hereof, multiplied by his then
current Base Salary if and only if such bonus would have been earned under the
plan in place immediately prior to the Executive's termination.

         (ii) Accrued Rights. The Company shall pay the Executive a lump-sum
cash amount, within ten (10) days of the date of termination, equal to the
Accrued Rights.

         (iii) Bonus Rights. The Company shall pay the Executive, within ten
(10) days of the date of termination, a lump-sum cash amount equal to the Bonus
Rights.

         (iv) Continued Benefits. Subject to Section 9 hereof, for a one-year
period following the date of termination, the Company shall continue to provide
the Executive and his eligible dependents, at its sole cost, with the Welfare
Benefits that were provided to the Executive immediately prior to termination of
employment.

         (v) Stock Options. Notwithstanding the provisions of any stock
incentive plan or award agreement between the Company and the Executive to the
contrary, (A) all options to purchase Common Stock which are not fully vested
and exercisable as of the date of termination shall become fully vested and
exercisable and (B) the period during which such options shall be exercisable
shall be extended until the first anniversary of the date of termination. All
such award agreements shall be amended by the Company and the Executive to
reflect the foregoing provision.

         7. Indemnification

         The Company agrees to provide to the Executive all rights of
indemnification and all director's and officer's insurance coverage to the
fullest extent permitted by law and by its Certificate of Incorporation and
By-laws.

                                       7
<PAGE>

         8. No Mitigation or Offset

         The Executive shall not be required to seek other employment or to
reduce any severance benefit payable to him under Section 6 hereof, and no such
severance benefit shall be reduced on account of any compensation received by
the Executive from other employment; provided, however, to the extent that the
Executive becomes eligible to receive welfare benefits pursuant to employee
benefit plans of a new employer that are comparable to the Welfare Benefits that
the Company is obligated to provide to the Executive pursuant to Section
6(a)(iv), the Company's obligation to provide such Welfare Benefits shall cease.
The Company's obligations to the Executive under this Agreement, including,
without limitation, any obligation to provide severance benefits, shall not be
subject to set-off or counterclaim in respect of any debts or liabilities of the
Executive to the Company.

         9. Tax Withholding; Method of Payment

         All compensation payable pursuant to this Agreement shall be subject to
reduction by all applicable withholding, social security and other federal,
state and local taxes and deductions for income, employment, excise and other
taxes. Any lump-sum payments provided for in Section 6 hereof shall be made in a
cash payment, net of any required tax withholding, no later than ten (10)
business days following the Executive's date of termination. Any payment
required to be made to the Executive under this Agreement that is not made in a
timely manner shall bear interest at an interest rate equal to 120% of the
monthly compounded applicable federal rate as in effect under Section 1274(d) of
the Code.

         10. Restrictive Covenants

         (a) Confidential Information. During the Agreement Term and at all
times thereafter, the Executive agrees that he will not divulge to anyone (other
than the Company or any persons employed or designated by the Company) any
knowledge or information of a confidential or proprietary nature relating to the
business of the Company or any of its subsidiaries or affiliates, including,
without limitation, all trade secrets (unless readily ascertainable from public
or published information or trade sources) and confidential commercial
information, and the Executive further agrees not to disclose, publish or make
use of any such knowledge or information without the consent of the Company.

         (b) Noncompetition. The Executive acknowledges that (i) the Company is
currently engaged in the business of providing high quality, low-cost telephone
calls over the Internet ("Internet Telephony"), (ii) his work for the company
will give him access to trade secrets of and confidential information concerning
the Company, and (iii) the agreements and covenants contained in this Agreement
are essential to protect the business and goodwill of the Company. Accordingly,
the Executive covenants and agrees that during the Restricted Period (defined
below), the Executive shall not, without the prior written consent of the
Company, (1) engage or participate in the business of developing, managing or
operating any Internet Telephony business (a "Competitive Business") on his own
behalf or on behalf of any person or entity, and the Executive shall not acquire
a financial interest in any Competitive Business (except for publicly traded
equity interests that do not exceed five percent (5%) of such class of equity)
or (2) directly or indirectly solicit or encourage any employee of the Company
or any of its affiliates to leave the employment of the Company or any of its
affiliates. For purposes hereof, the "Restricted Period" shall be the Agreement
Term (as may be terminated pursuant to Section 6 hereof) and, except in the
event of a termination described in Section 6(a) hereof, the 12-month period
following any termination of the Executive's employment hereunder. The advisory
services referred to in paragraph 3 (c) (iv) above shall not constitute a
violation of this paragraph 10(b).

                                       8
<PAGE>

         (c) Enforcement. The Executive acknowledges and agrees that the Company
will have no adequate remedy at law, and could be irreparably harmed, if the
Executive breaches or threatens to breach any of the provisions of Section 10 of
this Agreement. The Executive agrees that the Company shall be entitled to
equitable and/or injunctive relief to prevent any breach or threatened breach of
this Section 10, and to specific performance of each of the terms of this
Section in addition to any other legal or equitable remedies that the Company
may have. The Executive further agrees that he shall not, in any equity
proceeding relating to the enforcement of the terms of this Section 10, raise
the defense that the Company has an adequate remedy at law.

         11. Successors and Assigns

         (a) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and any person or other entity that succeeds to
all or substantially all of the business, assets or property of the Company. To
the extent not otherwise provided by application of law, the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, transfer or otherwise) to all or substantially all of the
business, assets or property of the Company, to expressly assume and agree to
perform the obligations of the Company under this Agreement in the same manner
and to the same extent that the Company is required to perform hereunder. As
used in this Agreement, the "Company" shall mean the Company as hereinbefore
defined and any successor to its business, assets or property as aforesaid which
executes and delivers an agreement provided for in this Section 11(a) or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law. Except as provided by the foregoing provisions of this Section
11(a), this Agreement shall not be assignable by the Company without the prior
written consent of the Executive. In the event that this Agreement is assigned
to any person or entity as may be permitted hereunder, the Company shall be
secondarily liable in the event that any such person or entity shall fail to
satisfy its obligations under Section 6 or 7 hereof.

         (b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts are due and
payable to the Executive hereunder, all such amounts, unless otherwise provided
herein, shall be paid to the Executive's designated beneficiary or, if there is
no such designated beneficiary, to the legal representatives of the Executive's
estate. This Agreement is personal in nature and the obligations of the
Executive hereunder are not be assignable to any person.

                                       9
<PAGE>

         12. Entire Agreement/Amendment

         This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof and, except as specifically provided
herein, cancels and supersedes any and all other agreements between the parties
with respect to the subject matter hereof. Any amendment or modification of this
Agreement shall not be binding unless in writing and signed by the parties
hereto.

         13. Severability/No Waiver

         (a) In the event that any provision of this Agreement is determined to
be invalid or unenforceable, the remaining terms and conditions of this
Agreement shall be unaffected and shall remain in full force and effect, and any
such determination of invalidity or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement.

         (b) The failure of a party to insist upon strict adherence to any term
of this Agreement or any occasion shall not be considered a waiver of such
party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

         14. Notices

         All notices which may be necessary or proper for either the Company or
the Executive to give to the other shall be in writing and shall be delivered by
hand or sent by registered or certified mail, return receipt requested, or by
air courier, to the Executive at:

                                    Stephen M. Greenberg
                                    [Address]




and shall be sent in the manner described above to the General Counsel of the
Company at the Company's principal executives offices at:

                                    Net2Phone, Inc.
                                    520 Broad Street
                                    Newark, New Jersey  07102
                                    Attn:  General Counsel


                                       10
<PAGE>

and shall be deemed given when dispatched, provided that any notice required
under Section 5 hereof or notice given pursuant to Section 2 hereof shall be
deemed given only when received. Any party may by like notice to the other party
change the address at which he or they are to receive notices hereunder.

         15. Governing Law

         This Agreement shall be governed by and enforceable in accordance with
the laws of the State of New Jersey, without giving effect to the principles of
conflict of laws thereof.

         16. Arbitration

         Except for any action brought under Section 10 which may be brought by
the Company directly in any court of competent jurisdiction, any controversy or
claim arising out of, or related to, this Agreement, or the breach thereof,
shall be settled by binding arbitration in the City of Newark, New Jersey in
accordance with the rules then obtaining of the American Arbitration
Association, and the arbitrator's decision shall be binding and final, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof.

         17. Legal Fees and Expenses

         The Company shall pay the legal fees and expenses incurred by the
Executive in connection with the negotiation of this Agreement. To provide the
Executive with reasonable assurance that the purposes of this Agreement will not
be frustrated by the cost of its enforcement, the Company shall pay and be
solely responsible for any attorneys' fees and expenses and any court or
arbitration costs incurred by the Executive as a result of a claim that the
Company has breached or otherwise failed to perform this Agreement or any
provision hereof regardless of which party, if any, prevails in the contest.

         18. Counterparts

         This Agreement may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.



                                       11
<PAGE>


         IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first written above.


                                            EXECUTIVE


                                            /s/ Stephen M. Greenberg
                                            -----------------------------------
                                            Stephen M. Greenberg



                                            NET2PHONE, INC.



                                            By: /s/
                                                -------------------------------
                                               Name:  _________________________
                                               Title:  ________________________



                                       12