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Video and Audio Conferencing Soars In the Wake of the Terrorist Attacks

The Wall Street Journal
By DON CLARK

Video and audio conferences surged in the wake of last week's tragedy, and some experts believe that continued skittishness about air travel could bring long-term gains to the industry.

Companies that provide conferencing services say usage swelled 10% to 50% last week, as companies stepped up efforts to communicate with their employees—including those temporarily stranded following the attacks in New York and Washington.

With the prospect of continuing delays at airports, some users expect demand to remain strong. "We have just been inundated since this happened," said Craig Brandofino, assistant director for audio and video services at the accounting firm Ernst & Young, which for the first time used its network of more than 100 video conference rooms to capacity. "I'm really seeing a surge in requests for new services."

The growth prospects weren't lost on Wall Street. Amid big declines in all the U.S. stock markets, stocks soared for providers of conferencing products and services, an upbeat contrast to the drubbing most other shares took during the first trading day since the disaster.

Beneficiaries included Act Teleconferencing Inc., whose shares were up 47%, or $2.35, at $7.35, in 4 p.m. trading on the Nasdaq Stock Market; WebEx Communications Inc., which was up 24%, or $4.11, at $21.26 on Nasdaq; Polycom Inc., which was up 33%, or $6.31, at $25.45 on Nasdaq; PictureTel Corp., which PolyCom is buying, was up 13%, or 59 cents, at $5.17 on Nasdaq; and Ptek Holdings Inc., parent of Premiere Conferencing, was up 2%, or four cents, at $2.67 on Nasdaq.

Business was already good for many conference-service providers. A souring economy, plus a combination of new Web-based technologies and falling prices, had been shifting corporate employees from airliners to electronic alternatives.

Conference calls, in particular, have surged in the past two years, driven in part by new services that let companies with special accounts set up calls automatically with no operator assistance. Usage of those services has been especially heavy since last Tuesday.

Genesys SA, a French company with major U.S. operations, said usage of its automated conference-call services grew 40% last week over the prior week. V-SPAN Inc., another conferencing company in King of Prussia, Pa., said demand rose 35% to 50% for some services. Global Crossing Holdings Ltd. said usage by some of its customers is up 20% to 35%, and said some of them expect to double their annual conferencing volume as a result of travel limitations.

Companies that deliver audio, video or computer data to users' personal computers also saw brisk business. PlaceWare Inc., a Mountain View, Calif., company offering Web-based conferencing, said its business is up 49% since the disaster. RealNetworks Inc., the biggest provider of Internet broadcasting video, says 11.4 million people tapped into audio and video content delivered through its network on Wednesday by news organizations and companies -- compared with about two million people on a normal day.

More than 13 million conference calls were placed through North American services in the first half of 2001, up 43% over the same period in 2002, according to TeleSpan Publishing Corp., an Altadena, Calif., research firm that tracks the industry.

Elliot Gold, TeleSpan's publisher, said the conferencing industry also saw a temporary spike in usage during the Persian Gulf War a decade ago, the last similar set of events. But demand remained above prior levels after the crisis, as more people got used to using the technology.

Others say it's too soon to tell if history will repeat itself. "Right now there is a reaction to what happened last Tuesday," said Sue Soares, general manager of AT&T Corp.'s teleconference business, which has also experienced a jump. "Whether or not business will continue, I don't know that anybody would know that."

But service and equipment companies aren't eager to convey the impression that they are profiting from disaster. Some declined to comment on their business outlook. Most are offering free services to companies in need. "I lost a couple of very direct personal friends," said Ken Hayward, V-SPAN's CEO. "I have no interest in being successful on the back of that situation."

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