deltathree

» see deltathree.com as it lived, on the wayback machine

~ the obituary ~

deltathree was founded in 1996 by five people, Dmitry Goroshevsky and Elie Wurtman among them, to do something that did not yet work reliably: carry a phone call over the internet. On 14 March 1997 they demonstrated one. The trick was never the audio, it was the handoff, taking a call across the network as data and dropping it onto the local phone system at the far end, so the person receiving it just had a telephone ringing in the ordinary way.

That arbitrage was the whole industry for a decade. An international call in 1999 was priced by distance and by monopoly, and routing the middle of it over IP cut the cost to something that did not care where the two endpoints sat. RSL Communications, an investment vehicle belonging to Ronald Lauder, took a majority stake early, and the company went public on NASDAQ on 23 November 1999, selling 6.9 million shares at $15 for net proceeds of $96.2 million.

In September 2001 it launched iConnectHere as the consumer face of the operation, with PC-to-phone calling and virtual calling cards, reaching 17 countries by that December. Two years later Skype made PC-to-PC calls free and the price of a minute began its long walk toward zero. Revenue was still $29.5 million in 2007. NASDAQ delisted the stock in March 2008 for trading under a dollar. An Australian company called D4 Holdings bought control in December 2009, and the service ran quietly for another eight years before stopping on 1 August 2017.

The cheap international call mattered enormously from Turkey, where the state carrier's rates were something households planned around, so the category was familiar long before any particular brand was. deltathree was not one of the names that reached us. It sold into American and European diaspora markets, and by the time I had a connection worth calling over, the thing everyone installed was MSN and then Skype.

~ the case file ~

~ the ipo ~

The offering priced on 23 November 1999, roughly four months before the NASDAQ peak, which is about as good as timing gets. deltathree was one of dozens of telecom-adjacent listings that year, and one of the few with a working product and real minutes moving through it.

It also picked up what most of that cohort picked up. A shareholder class action was filed in 2001 over how the IPO shares had been allocated, naming deltathree alongside the other offerings of the period. Those suits were aimed at the underwriters more than the issuers. The stock never saw fifteen dollars again.

~ the long decline ~

The problem with selling minutes is that anyone can sell minutes. Wholesale VoIP became a commodity the carriers ran themselves, and retail VoIP filled up with cable companies bundling a phone line into the internet bill. Skype gave away the part customers valued most and charged only for the leftover, the call that touched a real telephone.

What was left after the delisting was a small business with a long customer list and a residual wholesale operation. D4 Holdings took control in December 2009. The research office stayed at the Jerusalem Technology Park through those years, and the client software kept getting version numbers, eventually reaching 8.

~ what got buried with it ~

iconnecthere.com still answers. What loads is the retail front page from the middle of the last decade, still advertising broadband phone plans from $15.99 a month and PC-to-phone rates at 1.1 cents a minute, nine years after the service stopped taking calls.

Somebody has been wedging search-engine spam into the body copy, so between the calling-plan pitches sit paragraphs about expired domains and backlink authority. The deltathree.com domain went further than that. It is a phone and telecom review site now, with no connection to the company, running affiliate content under a name that used to be a NASDAQ ticker.

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