Newark, NJ – September 18, 2000 --- Net2Phone Inc. (NASDAQ: NTOP) today announced that it has formed a new company to develop and market network management software for Voice over IP (VoIP) and other packet-based multimedia networks. The new company, Adir Technologies, Inc., will offer Net2Phone’s industry-leading VoIP network management software to telecommunications, Internet, wireless, next generation and broadband service providers and enterprises worldwide.

Net2Phone also announced today that Cisco Systems, Inc. (NASDAQ: CSCO) has purchased a minority equity interest in Adir Technologies. Expanding the Internet Ecosystem, the companies have agreed to a relationship in which Cisco will jointly market Adir’s network management platform to its VoIP customers, offering communications providers and enterprises compelling new choices in VoIP solutions. Through this relationship, Net2Phone expects to realize a substantial new source of revenue from software licensing fees.

Adir’s existing network management software provides a broad view of the health, capacity and utilization of a packet-based network, including specific functionality such as real-time advanced call management, rating, routing, and authentication. These components are essential for managing traditional circuit-switched networks but have been missing in Voice-over-IP networks until now. Adir's technology can help provide a much greater Quality of Service (QoS) by providing advanced tools for fault detection, notification and diagnosis of network equipment from the voice network service perspective.

This software platform was originally created in Net2Phone’s Research and Development laboratory in Lakewood, NJ in 1995 when the company rolled out the first service to bridge voice communications with a PC using the Internet, and has been continually enhanced since then.

“One of the most compelling facets of our company has been the management platform, which to date, has been one of Net2Phone’s hidden jewels behind the successful implementation and acceptance of Net2Phone’s services,” said Howie Balter, Chief Executive Officer of Net2Phone. “While most telecom and Voice over IP equipment has been designed for heavy call processing, the software intelligence behind it has been lacking. Through the formation of Adir, we hope to enable service providers with the `brains behind the equipment,’ allowing them to realize the full value of their networks.”

“The strategic relationship between Adir and Cisco demonstrates the limitless possibilities when you bring together a proven IP software solution with the worldwide leader in networking the Internet,” said Cliff Sobel, Chairman of Net2Phone. “We expect to identify and increase shareholder value through the separation of this product-oriented business model from the general Net2Phone services-based opportunities. By partnering this core platform with companies like Cisco as well as other communications providers worldwide, we believe we can maximize the potential for all companies involved.”

“Cisco is committed to delivering voice, video, and data services over broadband networks,” said Alistair Woodman, Director of Marketing at Cisco’s Voice and Video Services Business Unit. “A key element of that strategy is teaming up with industry-leading partners to provide complete, end-to-end solutions for our customers. By working with Adir to open up Net2Phone’s proven network management platform to support Cisco voice gateways, Cisco and Adir will be able to offer customers an exciting additional choice in management solutions for packet telephony networks.”

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. More information about Adir can be found at www.adirtech.com.

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 October 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.

Editor's note: Net2Phone CEO Howie Balter will host a conference call for the news media and analysts at 9:30 a.m. EST today. Reporters and analysts can call 800-446-1671 in the U.S. and 847-413-3362 elsewhere. A replay of the conference call will be available beginning at 11:00 AM EST today until October 2, 2000 at 630-652-3044, access code 2859897.