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The Other Victims Of The Vonage Ruling
Vonage (VG) has been a disaster of a public stock. It came public at $17 and has traded down to $3.37 on business woes and a nasty patent dispute with Verizon. Today a judge ruled that Vonage must stop acquiring new customers until the patent dispute is resolved. I wonder what that will do to the stock when the market opens on Monday.
But there are other victims of this ruling. Vonage is one of the largest advertisers on the Internet. I would guess they are in the top 10 for sure. [CoryS says in the comments that they are #12 and spent $7mm online in January]
I assume that they will have to stop their advertising in light of this suit. How much lost revenue does that mean for Yahoo! (YHOO), AOL/Ad.com, MSN, and others?
Probably not enough to make a dent in their stocks, but certainly enough to get them scrambling to make it up somewhere else.
Comments (6) | Posted April 6, 2007 in Venture Capital and Technology
Comments
Have you seen any brand equity reports with Vonage v. other telephony players?
I'd be interested in their top of mind performance as well as preference and branding associations. They have created brand equity - hard not to when spending a few hundred million over a few years. Whether its a positive brand image worth sustaining as the fight continues will be interesting to see.
Clickz.com has them as #12 for January 2007 with $7mm in media value. www.clickz.com/showPage.html?page=3625188
Posted by: CoryS | Apr 6, 2007 4:23:09 PM
That was quick -- the appellate court already stayed the order. Article here
Posted by: Steve | Apr 6, 2007 6:24:51 PM
The bankers should give back their fees to make up the quareterly difference. This was a poisoned deal from the beginning.
Everything bad about Wallstreet at IB's is in this deal.
Lou Dobbs is probably buying though
Posted by: howard lindzon | Apr 6, 2007 6:59:22 PM
I'm with Howard. Just WHAT were they thinking?
Posted by: Stephen L. McKay | Apr 6, 2007 9:02:06 PM
Last May just after the IPO, we rated Vonage a 'C' using our Disruption Scorecard, still the lowest of any company we have ranked. Many thought this was absurd.
Why did Vonage rate so low? Vonage seemed to have a dot-com business model and its service had no unique attributes of value.
Details:
http://www.ondisruption.com/my_weblog/2006/05/vonage_disrupti.html
Mike
www.OnDisruption.com
Posted by: Michael Urlocker | Apr 6, 2007 9:43:52 PM
My recient corespondence with Vonage:
Case # 11289786
I called many time today (4-7-07) concerning an invoice dated this date, and charged to my account the same day (apparently before I was even sent the charge) The charge is 118.74 for a Starcom telepone, that I never ordered, and never received. Invoice # 44806470. I had, in February of last year (2006) oredered a new account with a starcom wi fi telephone. I had it for a year, but was never able to make it work properly. I couildn't log into wi fi systems that required a log in. (this defect was apparently noted on sever blogs, which I wish I had read before ordering the service).
I called last month (March) to cancel the service. I was serviced by a very understanding reprehensive of Vonage, who persuaded my not to cancel, but to try a v phone instead. I asked about a credit for my Starcom phone, since it was useless to me, and he said I could receive a credit, by mailing it back to Vonage. He gave me mailing instructions, and a return code, which was followed up by an email with the same information. I mailed the starcom back the next day. He also said he would give me credits for the past inability to use the service. I never got credit for the phone I sent back, and am now being charged for an additional starcom that I never ordered, would not want in any event, and never received.
I spent all afternoon with vonage representatives on 4-7-2007, and had to ask for a supervisor 3 times. Although I had a case number (112897) each representative gave me different answers, and two supervisors put me on hold, and disconnected me after long waits.
I do not intend to forget about this, and asked that the last supervisor note on the case file that I will contact the credit card company asking the charge be denied, and that I intended to contact the attorneys for Verizon, and the federal judge handling the Verizon case against Vonage, and that I will try to contact every regulatory agency I can find with an interest to make this matter known. I consider you’re charging me before billing me for an item I neither ordered or received, fraud. I again demand that charge be reversed, and in addition that a credit be issued for the starcom phone I returned, and in addition, a credit for the service between Feb of 2006 and March of 2007 which would not work.
Posted by: Hothbox | Apr 7, 2007 6:26:18 PM
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