It was there they launched Dialpad, which Serome spun off in 1999. The opportunity is huge. The twist that makes Dialpad different is taking the intelligence other Internet phone companies require customers to put on their personal computers and burying it instead deep inside the network on a Web site. That ease of use is Dialpad's strategy for making Internet telephony as popular as e-mail. Dialpad's lines may be free of charge, but like most Internet phone lines, they're not free of static.
Analysts maintain that the company needs to improve the service's sound quality.
Dialpad says it is working with ISPs to limit those hops. Net2phone has more control over that process because it owns its own private network. That should make its calls clearer, says Dylan Brooks, an analyst at Internet researcher Jupiter Communications. A fast start notwithstanding, it remains to be seen if Dialpad can make its business plan work. The privately held company derives most of its revenue from ad sales, says Garlinghouse, who would not release revenue figures.