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Vonage gets pummeled in court again

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

 

I've had Vonage for over 2 years now. I've not had service problems of any kind. The Toshiba modem gave me fits for about a week, but we switched to a better one and haven't had issues since then. The local phone compnay, Qwest, which offers the WORST possible customer service imaginable (unless you count AOL) calls and mails me every month to ask me to pay twice the price for the exact same features...............except they don't offer unlimited calling to the US and Canada and about 5 other countries. Comcast is now offering a 'Vonage-like' service. But their price is far higher and their service on our cable internet and television is mediocre at best. It sounds like some of you poor saps have had bad luck with Vonage. Well, guess what............there is good and bad in every company and product ( yes, that's true you MAC loyalists) and it's all a crap shoot at best. I'm sure a larger company will swallow Vonage eventually, but hopefully,an enterprising new company will fill in that void.

I join the many who love Vonage... easy to hook up, easy to use, email msg. when I have voice mail, all the free features, and the clearest most reliable sound quality of any I've tried. And its CHEAP.... by the way, easy way to disconnect, just stop paying... they disconnect you.

I've had Vonage residential and business service for over 2 years. I've closed accounts and moved accounts. It is not difficult to cancel service and I've never had any issues with their customer service. Comcast on the other hand has the world's worst customer service and costs more than Vonage. And don't forget, Vonage has the best jingle, Woo Hoo Woo Hoo Hoo!

I like Vonage. I have used them for more than a year and have had no problems with their product or service. I have had problems with my Verizon DSL service, which I cancelled, and then I had terrible problems with Comcast. Time Warner is now my cable server, and they are the equal of Verizon and Comcast. They can drop my service for three to six weeks at a time and be totally unconcerned with it. They give me trouble ticket numbers to refer to for future communications, but they always act like they have never heard from me about the problem. They say they will send out a technician "between 8 AM and 7 PM, but the technicians never show up. When it comes to customer service, Verizon, Comcast and Time Warner do not deserve the public's faith. If any of these big companies want to please their stockholders, they might try pleasing their customers first.

After dealing with Vonage for two yrs, I decided to change my service to Skype. It was the worst experience of my life to try to disconnect my service from Vonage.  The phone service was fine, but their customer service is from another planet. It took 5 calls and three weeks to get them to disconnect the service. It was transferring me to different CSR's and put on hold and "can I ask you one more question" before being put on hold for numerous minutes,and then charging me for another months service. Bon Vonage !!!

vonage works great!

vonage works great and great service and low price

I have had Vonage for 2.5 years. We had some problems at first getting the numbers change over. It toke too long to get this done about 2 month to work out all the bugs. Now all is fine, and I am saveing money. I hope they done go out of business. I don't want to go back to the quote "Big Boys" all they do is jack up the prices.

In the beginning Vonage was Great, and we had no problems with their service in Alabama, Then we moved, and in the process, our Vonage modem & phones disappeared? Then, I got involved with a 3 year project in Madagascar and decided to cancel my Vonage service, the nightmare started! It took 3 MONTHS to Finally have my service discontinued! Vonage has ABSOLUTELY the WORST Customer Service. I had sent numerous emails thru the link they suggest to use to cancel your service etc. with never so much as an acknowledgment. Finally I placed an International call to Vonage and  the gal that dealt with me would not shut up and listen, she was an absolute air head and kept telling me Vonage would not process a service disconnect via email requests, and that I would have to call them, at that point I saidl, listen I just called you, would you please cancel my service. It was like she was talking to herself and was not even hearing me!! After 25 minutes and her saying Vonage was going to ship me a free phone system etc. I lost it!! I said again I DO NOT WANT your service any longer, do you hear me. FINALLY she said so you want to cancel your service, she put me on Hold forever then came back and said my service was disconnected...NEVER will be associated with Vonnage AGAIN! OH yes and the 3 months that they debited my bank account well they said they would not refund the charges.. It is worth the money just to be away from VONAGE!!

We have Vonage in West Florida. Except for a few customer service issues, we have been satisfied! The price makes it very appealing! I agree with those who have said that it seems the "Big Boys" beat down the competition so they can maintain their dominance whatever business they are in. To me it is just another indication of the state of our nation.

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