For obvious reasons, I have been preoccupied, but I wanted to take a moment to point out the Vonage story in the New York Times, which despite being well intentioned fails to ask the tough questions, and falls back on rather tame and self serving comments from analysts. Lets break it down….
1. Vonage now has two million customers, which is great, except that Time Warner, Cablevision and Cox are getting there, and Comcast has just gotten started.
2. Those two million customers came after Vonage spent over half a billion dollars. It will need three million more to be profitable. As NYT itself notes, the company loses “2.3 percent of its customers each month.”
3. Qaisar Hasan of Buckingham Research raised his rating to hold but his price target is still $6 a share. In other words, if you took his advise, bought some shares and held them for a while as he suggests, you be out of $3 a share. “This company could be belly-up in three years’ time or be very successful,” he tells the Times. Grrrr! [By the way, in an online poll following Vonage’s IPO, nearly 29% of 755 voters said the stock is going below $5 a share. 33% had predicted it would sink below $10. ]
4. Price war rages, and spend-and-pray competitors are still nipping at Vonage’s heels.
5. The V-Phone…. how about using this device that costs $5 less and still does more including making free phone calls.
Mark Evans, Andy Abramson, Jon Arnold, and Aswath have more on this.
Am reading a great book at present called “broadbandits” the name of the author escapes me.
I think in a couple of years when you reprint and edit this Om that you will be adding a chapter called Vonager
okay, we all know you have it in for/hate/loathe/love to pick on vonage. please ease it up. its depressing and mean spirited. i happen to be a big fan of vonage because i dont want to give my cable company any more money than they are already stealing from me. and i dont want to be bound to another gimmicky proprietary device from skype that requires my computer to use.
and i find your cartoon avatars silly, unprofessional, and childish.
Don’t confuse product value for money and share value for money. As a consumer I couldn’t give a monkey’s about the share price if the product is good and cheap. If Vonage goes t**s up, who cares (shareholders?, tough), I got to use a great product and screw the telcos and cablecos, could life be better than that.