INTERACTIVE: MUSICIAN BUILDS BUSINESS ON UNIFIED MESSAGING SERVICE: $16 MIL AOL DEAL IS JFAX'S LATEST MILESTONE

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America online and a German rock star might seem an unlikely duo. But a recent $16 million deal brings Jfax Communications, owned by 25-year-old musician Jaye Muller, into a three-year agreement with America Online.

While touring the U.S. in 1994, Mr. Muller kept missing important faxes and voice mails. "I was changing hotels every night, and faxes were left at the previous hotel," he said.

So, in 1995 Mr. Muller founded Jfax (http://jfax.com), devising a unified messaging service that provides a user with a local phone number where people can send faxes and leave voicemail messages. Up to 200 of those messages are then automatically forwarded to a user's e-mail account for $12.50 a month, plus an initial $15 registration fee. (Jfax pricing is the same in all its partnerships.) Subscribers can be paged with their faxes and voicemails and will soon be able to pick up messages over the phone.

KEY PLACEMENT

Jfax is paying AOL $16 million against a portion of future revenue sharing, and allowing the online service the option to take up to a 15% stake in the messaging company. In addition, Jfax has garnered exclusive agreements with CompuServe, Qualcomm's Eudora e-mail software and Telos Corp., which provides networking services for the U.S. government.

By landing real estate on AOL's mail screen, AOL.com, and on its new Workplace, Computing, International and Travel Channels, Jfax could get upwards of half a billion page views per year. For the last few months, AOL has been testing Jfax, gearing it up to handle potential customer demand.

"They have 9 million customers -- it better be scalable," Mr. Muller said.

Jfax isn't the only company trying to integrate telecommunications formats. Lucent Technologies and Milpitas' Octel Communications are just a few that offer proprietary software solutions, catering mostly to large companies. Which is why it's surprising that AOL went with a startup with a staff of 60, and local phone numbers in 50 cities in the U.S. and overseas. (Jfax will only say that its membership is growing by 20% a month.)

19 MILLION E-MAILS A DAY

"For our members, it represents a great convenience," said Myer Berlow, senior VP-advertising sales at AOL, noting that it processes 19 million e-mail messages a day. "It allows someone to change the paradigm of communication inside the e-mail."

In fact, being a startup worked in Jfax's favor, Mr. Berlow said. "When someone is really invested in a business that makes them a strong partner," he said. "This is their vision."

CAMPAIGN IN THE WORKS

So far, all of Jfax's marketing has been word of mouth. Working with several ad agencies, which it declined to disclose, it's launching a direct mail and online marketing campaign in November.

While he's recording a new album, Mr. Muller is also selecting an agency to create a TV and print campaign in '98.

"1998 we see as the year of unified messaging," Mr. Muller said. Behind it all,

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