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Videoconferencing Companies Team Up

First Virtual Communications (www.fvc.com) announced on Tuesday that it has finalized a strategic alliance with PictureTel ( www.picturetel.com) — a deal that combines two leading videoconferencing companies. The agreement further unites the industry since Polycom is in the process of acquiring rival PictureTel, and First Virtual recently acquired CuSeeMe Networks.

In May, Polycom said it was acquiring PictureTel, in a $362 cash and stock deal. But there may be hiccups; the Department of Justice said it requested additional information from the companies since the transaction may fall under the Hart-Scott-Rodino Antitrust Act. The request by the department isn't especially troubling, however, since it reviews many mergers and acquisitions, to look for anticompetitive transactions. Polycom said it would furnish the agency with "whatever information it needs as quickly as possible." As a result, the deadline for the completion of the stock transaction was postponed until midnight August 14.

The agreement between PictureTel and First Virtual is a marketing and distribution alliance. The companies will combine to offer interactive voice, video, Web collaboration, server integration, and other desktop or room-based conferencing systems.

"We're pleased to have completed the definitive agreement with First Virtual Communications. We have already made substantial progress in defining our joint development roadmap and have begun joint sales and marketing activities,'' said Dr. Norman Gaut, PictureTel's chairman and CEO. "As we address the large and growing market opportunity, this relationship brings together strengths from both companies that will allow us to deliver a comprehensive rich media solution set powered by our iPower technology and First Virtual's end-to-end Click to Meet application server technology.''

Killko Caballero, president and CEO of First Virtual said that the companies hope to offer a "fully integrated, end-to-end solution to enterprises and service providers."

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