Vonage, Verizon Settle

Today gave some great news for Vonage and its shareholders. Verizon and Vonage have settled the ongoing patent dispute for a maximum of $120 million. The company saw its stock close at $1.53 at the end of the day’s trading, down 4.38%. This news caused the stock to jump in after-hours a total of $1.12 or 73.20% (as of 6:00 pm EST). Certainly this is a staggering jump on a percentage gain.
This bit of positive news may or may not be the start of some positive momentum for this poster-child for pure-play consumer VoIP.
What happens next is hard to know but there is a patent dispute with AT&T which also needs dealing with.
The company is obviously more of a legal play than a communications/tech play and I wonder if from a financial perspective it is even fair to be looking at Vonage as a VoIP company. After all, when the fate of the company rests more on jurors and judges than customers, should this company set the pace for consumer VoIP?
For the sake of customers, shareholders and Vonage employees, I hope all legal issues get cleared up soon and the company can get back to focusing on attracting and retaining customers and not on winning patent disputes.
On that note, I should mention – I just switched to cable VoIP and while it works fine, I can’t believe how much more functionality Vonage had years ago than Cablevision has today. Vonage should spend some of their marketing dollars on explaining how many benefits and value-added services they have and not focus so much on price.
Vonage, you are the Lexus or Mercedes of VoIP… Why do your ads make me think of Chevy?

  • Phineas J Whoopee
    October 25, 2007 at 9:41 pm

    I agree with your Mercedes vs. Chevy assessment and also with your comments about Vonage’s advanced functionality. Worries about Vonage going the same route as other failed VOIP’s led me to try both my local cable company and Verizon’s VOIP offering. While the clarity of calls was acceptable, the web interface and accesibility options were grossly inferior to Vonage’s services.

  • Rich Tehrani
    October 26, 2007 at 10:34 am

    Thanks for the confirmation. The company could benefit from changing its ads to be more Lexus-like. The ads should make us think premium service and quality.

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