internal modem not detected

you need to know who the manufacturer of the modem is. Search for the modem manufacturer online and download the drivers. If modem is integrated with your motherboard, then use the drivers that came with the computer or find out what the revision of the motherboard is, and try and download the drivers for integrated components from their site or other site that hosts these drivers.
USB devices, printers, monitors are plug and play devices, while Sound cards, modems, TV Tuners, are not. That is why Win98 may require the drivers to recognize these add-ins.

Check if there is any conflict with the IRQ address.

In this case you must start control panel, Add hardware, and select the device, and model.
If Win98 have not in his device database, you need the manufacturer driver to install.

Win 98 = older PC, therefore the modem may have died. Is this a new modem or an original installed by OEM on this PC ? If it came with the PC it may be bad.

how does it look in Device Manager
did this used to work? or is this a newly added modem. is it replacing an on-board modem that failed. and that modem is now disabled in bios, yes?
another long shot but if this is older computer, check to see if both com ports are enabled in the bios. if that looks right i agree, modem kaput. can you try it in another computer?

Probably a software modem. Is not automatically detected without the driver beig load first! Make sure you have no yellow excalmations in device manager and if you de uninstall the device. Run the install from your disk or download and it will be detected after.