Vonage’s Friday was not the kind of day you’d wish even on an enemy. In the morning the trial judge in its patent loss to Verizon ruled that Vonage would not be allowed to sign up new customers. In the afternoon–after the close of business–an appeals judge temporarily stayed the injunction, allowing Vonage to operate as normal, whatever that is these days, until at least another hearing can be held. As of this writing (Sunday night), no date has been set for that hearing. Given the rate of Vonage’s spending to gain those new customers, we wouldn’t blame stockholders if they heaved a sigh of relief that someone was getting the company to stop. But of course, no one could stop customers from leaving, and it doesn’t take much imagination to believe that a lot of clients might be having second thoughts about this whole VoIP thing. It’s true enough that it’s the pioneers who get arrows in the back, and at least part of Vonage’s pitch is that VoIP isn’t the frontier anymore. Surprise!
For more about the Vonage dust-up:
- read this PC World article
Related Articles:
Vonage reportedly signs with VoIP Inc. as Plan B. Report
Signs of life for Vonage–for now. Maybe. Report
The perils of Vonage. Report
Bated breath on Vonage patent loss. Report
Verizon wins Vonage patent suit. Report
The possibility that the patent problem may go beyond Vonage is pretty chilling, of course. There’s one report that cites “industry insiders” (read: venture capitalists) as being worried that the $2 billion that’s been poured into the VoIP industry is at risk because of patent concerns. On the other hand, that’s what due diligence is about, and it’s considered kind of surprising that Verizon’s claims are being taken seriously only now. Vonage has said that it has a workaround; this might be a really good time to deploy it.
For more information about VoIP investment in the aftermath of Vonage:
- read this article from Red Herring
Whatever that workaround is, it apparently won’t include the deal reported last week with VoIP Inc. A Vonage spokeswoman says that the agreement is a run-of-the-million network termination deal, with Vonage dumping minutes onto the VoIP Inc. network. If Vonage does have a rabbit to pull out of a hat in its patent lawsuit, this deal with VoIP Inc. is neither wildlife nor haberdashery.
For more about the Vonage/VoIP Inc. agreement:
- read this article from CNet
Related Article:
Vonage deal for Verizon bypass. Report
So what if a Vonage customer does want to bail? The enthusiast media is starting to gear up about the question, and is finding that the options are kind of limited. It’s not like Vonage lacks competition, but all the money it spends on promotion has clearly crowded out other carriers in consumers’ minds. Cablecos are an option, but not for careful consumers who value pipe diversity and don’t want a double or triple play. The lesson for service providers: if you want a piece of the consumer business and you have a couple of extra million lying around that you could plug into the marketing budget, this might be a good week to do that. Assuming, of course, that you don’t have a Verizon problem of your own lurking in your network.
For more about where to go after Vonage:
- read this blog entry from ZDNet
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