Wednesday, January 13, 2010

Vonage Changes Direction

Who knew that Vonage was even worth a post any more? Forbes wrote one page up on the VoIP company this month.

Interesting fact, according to Forbes, "Internet-based calling is a crowded $43 billion market worldwide". No wonder there are so many getting in the game. Forbes did get snarky saying: "One radical idea under consideration is to make a profit."

Vonage has been busy:

"The company bled customers in recent years as it battled five large lawsuits, including patent claims from competitors, a 32-state investigation into its business practices and shareholder class actions related to its 2006 initial offering. In May 2008, faced with $253 million of maturing debt, Vonage admitted that bankruptcy was a possibility."

Vonage got new CEO in July 2008. (Who knew?) "Marc Lefar, a 46-year-old former chief marketing officer at Cingular. He settled the shareholder litigation and got $220 million in financing from Connecticut hedge fund Silver Point Capital to avoid bankruptcy."

Vonage market cap is around $300M against 2009 expected revenue of $888 million. Losses in 2009 were $50M.

"Vonage finds itself competing with cable companies that offer cheap Internet calling plans bundled with television and Internet services. Comcast, Time Warner Cable and Cox Communications all boast bigger Internet calling businesses than Vonage, which has 2.5 million customers, according to research firm IDC. "There will always be a market for really cheap voice [service]," says Paul Brodsky, an analyst with research firm TeleGeography. "Making money on really cheap voice is another issue."

No comments: