• Jim Courtney on Vonage IPO -- Another Benchmark for Skype Valuation

  The lesson of Bubble 1.0/Web 1.0 is you have to look beyond the revenues. From my first employer over thirty years ago, revenues mean nothing unless margin and management of expenses is under control. In this case, Vonage is spending lots of money to recruit a customer base away from the legacy competition -- something the telcos and cablecos already have when entering the VoIP space.

  Bottom line once again; Vonage has the wrong business model to be profitable in an Web 2.0/Voice 2.0 age.

  (And Mark Evans has been even more skeptical of the Vonage IPO.)

• jw on Vonage IPO -- Another Benchmark for Skype Valuation

  Your valuation methods are poor. First - Start with the revenue, not some Eyeball-non-paying customer method like a 1999 dot.com. You want to compare Skype to Vonage? Do it this way:

  
  Here's how I look at it - if Ebay paid 2bil for Skype I think a company with better marketing and a simpler product for mainstream US telephone users with 1.6+ million monthly paying subscribers is worth at least as much as Skype. How much revenue did Skype do last year? 24 mil and Ebay still thought it was worth 2 billion. Vonage Revenue was 118 mil this past QUARTER - that's more than their entire 2004 revenues. A year and a half ago a VOIP expert and blogger thought Vonage was worth 2 Billion and compared it to Packet 8 to arrive at the figure (http://evans.blogware.com/blog/_archives/2004/11/22/189337.html) and that was a year and 1/2 ago before skype! So if Ebay priced Skype correctly - let's even say they overpaid, and packet8 is priced as it is but with weak growth unlike Vonage, conservatively I feel we're looking at a $4 to $5 Billion company this year and with further growth into businesses and residences at a fast pace. So that would put Vonage at 35-40 a share this year. You also need to give them a premium for first-movers - because really no-one in the states can come close to the kind of roll-out they've done - and you know that's true. Skype may have the greatest technology in the world with the hippest product for mid-level computer users. I think there is a place in America for Skype and Vonage just like I feel both Yahoo and Google do pretty well don't you agree? Vonage has it's Marketing advantages which have translated into a lot more $$. The sad thing with Skype - It's global and has 100million users but pathetic revenue. As Vonage can attest - Americans will pay money for a simple cheap and effective ld service. Skype is cheap and very cool - but Simple? Have that many small biz and residents really heard of it? It doesn't market to mainstream America like Vonage does. It markets to myspace and instant message groupies as another FREE service. with some $$features. this is not a fair comparison to vonage. Skype is Good but it's not taking the approach Vonage has, and Vonage will continue to ride the momentum it has here in the States a long time before Skype poses what some may call a threat.

• Erick K Loss on Vonage IPO -- Another Benchmark for Skype Valuation

  I am a systems integrator. I work with data, phone, TV and security systems everyday. I set up systems for colleges and hotels. I tried Vonage for our new office phone system. I could not get it to ring through consistently. Calls were not completed, some were dropped. For one week I had no phones at all. Customers would write e-mail or call my cell phone to ask if we were still in business. They would get messages saying that my number was disconnected or that it was not valid.

  I spent over 11 hours on-line or on hold trying to get help, most of it on hold. When I called to cancel service I told them that I needed to keep the number and it would take a few days for the phone company to connect me again. They cut me off right then. I had no phone service. Qwest could not reconnect me with that number unless it was active. I had to spend 3 hours trying to get Vonage to activate the number again. Then they gave me a temporary number for 3 days, which no one knew to call, before I got my old number and same crappy service back. When I was finally connected to a land line again they gave me a $12.50 credit for my troubles.

  Vonage should be put out of business. They ruined mine for almost a month. They have a cruddy product, lousy service and tech support and terrible business practices.

  If you have to choose between two cans and a string and Vonage, take the cans and string. You'll be happier with the service.
  

• dhruva on Vonage IPO -- Another Benchmark for Skype Valuation

  Well I use vonage, I am not a us citizen so dont know if I can apply for the Direct share program.
  Questions unanswered are:
  1. skype: 100 million users, How many are paid?
  2. Do skype customers also have a land line?
  3. Do Vonage customers still have land line?
  4. What about 911 Calling, has skype overcome this issue?

  I think the real problem is the customer acquisition cost for vonage...

  Vonage needs to get the broadband customers before the cable and dsl guys get in.

  Vonage need to change their marketing strategy. I can pay for broadband and vonage for the price of my old landline phone with the same features provided by vonage service.

  vonage needs to get these customers and get them now!!
  

• continued in the Skype Journal Comment River: 200 fresh comments

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