Web portal Yahoo! Inc. has quietly sold about half of its 5 percent stake in telephony play Net2Phone, Inc., according to documents filed with the Securities and Exchange Commission (SEC).

Since the beginning of July this year, Yahoo! has sold more than 500,000 shares of Net2Phone stock in batches at prices ranging between $2.22 and $4.85 per share.

Yahoo! officials could not be reached for comment on the sell off of its minority stake, which was part of a $150 million stock swap transaction hammered out in March 2000.

It comes on the heels of Net2Phone restructuring an agreement with Yahoo! to give away free Web telephone calls on the mega-portal. At that time, Net2Phone absorbed a one-time charge of $113 million, which was tied to the write-down of its ownership stake in Yahoo!.

Last summer, Net2Phone latched on to the coat-tails of Yahoo!'s instant messenger product by embedding its software to offer free Web-based calls throughout the US and Canada but that deal had to be rejiggered after Net2Phone found itself spending approximately $8 million to subsidize free calls made by Yahoo! users.

The reworking of that partnership meant that Yahoo! would have to purchase IP-based voice services for its instant messaging applications and for its voice portal. Originally, the deal called for Net2Phone to shell out top dollars to Yahoo! for PC-to-phone category exclusivity and for extensive marketing and promotional campaigns over a three-year period.

As part of the restructuring, Net2Phone eliminated all future payment obligations to Yahoo!.

Net2Phone, the IDT-owned company which bundles its Voice-over Internet Protocol (VO-IP) telephony with services offered by AOL Time Warner, Microsoft and Yahoo! is in the midst of a strategy shift that involves the cable telephony business.

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