Vonage gets pummeled in court again - Top Stocks Blog - MSN Money
 
Search Top Stocks:

Vonage gets pummeled in court again

Posted Sep 26 2007, 03:44 PM by Kim Peterson
Rating:
Filed under: ,

Tough week for Vonage, the one-time Internet calling darling that has more courtroom drama than a season of "Law & Order." But I think the company could be an attractive acquisition target.

Today an appeals court upheld a verdict against Vonage in a patent case involving Verizon. Now the courts will recalculate how much money Vonage should pay (the previous total was $58 million plus 5.5 percent royalties on future sales). Trading was halted briefly on the stock, and its share price fell 26 percent to 96 cents.

This follows yesterday's news that a jury found Vonage guilty of infringing patents owned by Sprint Nextel. Vonage was ordered to pay nearly $70 million, which caused the stock price to plummet 34 percent. Woe to the investors that got in at the company's $17 IPO price.

But Vonage's problems run much deeper than patent infringement. The company only added 57,000 subscribers in the second quarter, down from 166,000 the preceding quarter. The drop was due to a big pullback in company marketing. And those subscribers came at a price: nearly $290 spent to acquire each one in advertising and other costs. 

And worst of all: Comcast, on a roll with its "triple play" cable-Internet-phone package, outpaced Vonage in the quarter to become the country's top Internet calling service provider.
 
Silicon Alley Insider is questioning whether Vonage will shut down. Giga Om says it's only a matter of time:
"By better fiscal management and with enough cash in the bank, it can prolong the agony, but ultimately something dramatic needs to happen for the company to dig itself out of this hole."
At least Vonage has a solid base -- 2.45 million subscriber lines. And getting those customers cost a lot of money. The company could be acquired just for its user rolls alone.
Comments

 

Vonage has been great, would never think of switching to another company.  

Vonage is the best service that i've had in a long time.Time Warner would charge almost double,with half the services.Go Vonage!!!!

Vonage's customer service have been great in getting you connected when

they can't connect to my internet service.  It is generally the problem with my ISP

that I lose my vonage phone line.  The price is right.  Through all their problems

they are a stalwart group.  Love them!!!!

I have had vonage for 6 years, one of the first adopters and it has been great, the price is outstanding and ubeatable and the customer service has gottent better with each year.

Vonage is not the only reasonable solution out there.  I have been using Packet8 for the past 2 years - Unlimited minutes and all the phone features i can use and then some.  Price is cheaper than Vonage as well.  Never had issues so can't really say how good or bad their customer service is.

i am very pleased with vonage it is cheaper that most 39.00 month. i love it .

Vonage works great for me but so does Skype which is free.

How do Comcast and others offer the same service without getting sued?

I sorta hope Vonage does go out of business because that is the only way to cancel. Their customer service is like dealing with the Mafia or the IRS!

I'm unaware of any alarm company that works reliably with Vonage.  Because of this they don't allow it as a primary means of communication.  Also, most of the Vonage boxes I've seen don't have a battery backup so if the power is out you not only don't have a phone but your alarm can't call if it needs to.

We wanted to switch to Vonage, but got mixed up in the enrollment process and did not get our phone number switched over, so we ended up keeping it as a second line - reading about less than stellar call quality and problems with 911 dialing, it was a right decision. Indeed, the call quality can sometimes be sub-par, compared to the regular land-line (digital phone through the cable company).

However, for the money, Vonage serves us very well, with unlimited NA long distance calling and all the included features. Also, the virtual telephone number is great, allowing our family and friends in Canada to call us for free. I sure hope they stay in business.

Well, I am not sure what planet you people that love Vonage are on. I think the service is far below standards and even getting someone on the phone that speaks any clear English is hard! I had to get the "device" to use my phone and the phone line was always static infused. (Not to mention the fact that my cell worked better than the Vonage service.) No one could even hear me when they called and for a while I thought I was with the "can you hear me now" company! I live in a small town outside of a larger one and you would think that the service would be good but I assure you that my experience was really BAD! Then I get my credit card statement and they have charged me for service they said I could try for a month free plus other charges. I had to threaten them to get them to refund all of my money. They tell me that I am getting a refund, like the check is in the mail perhaps. I will believe it when I see it..... I am glad that some of you have had great service, I have not.

Send a Comment

Comments must be directly related to the blog entry. Comments with offensive language will be deleted. Your e-mail address won't be displayed.

(please, no HTML tags. Web addresses will be hyperlinked):