Vonage warns it could file for bankruptcy

April 18, 2007
According to the Asbury Park Press, Vonage warned that patent fights could lead to bankruptcy and the company's liquidation. Vonage lost its patent lawsuit with Verizon and as I have stated before, if this is upheld on appeal, Vonage will have to pay $58 million in damages and 5.5% of revenue. According to the article, Citigroup Inc., a manager of Vonage's IPO, said last week that the risk Vonage will file for bankruptcy by 2009 has "increased materially."

Who will be Vonage's savior? I already explained that news reports were wrong and that VoIP, Inc. was not Vonage's savior. Could it be a Sprint buyout that will save Vonage? Not according to today's Sprint: Bon Voyage Vonage article, which explains : its customer base of 2.2 million is expected to shrink at a rate of more than 27% a year. "It's a bad deal for Sprint," says Michael Mahoney, managing director at EGM Capital hedge funds in San Francisco. "I'd look at it as a distraction from [Sprint's] primary challenges." .

SupermanPerhaps Vonage's knight in shining armor could be Rates Technology, an owner of several VoIP patents? Rates Technologies was able to extort acquire royalty fees for their VoiP patents from such heavyweights as Alcatel, GN Netcom (now Jabra), and even Google (See Rich Tehrani's excellent article on Rates Technology and their VoIP patents).

Who will save Vonage from Lex Luthor, CEO of Verizon, trying to dominant the corporate VoIP world through any means necessary including a seemingly obvious patent extortion.

"Superman, save us!"

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