The Verizon win in the patent infringemetn case, followed by a subsequent injunction has lots of people wondered what's next. My thoughts tend to be far astray from several in the mainstream, so I thought I'd share them.

First, I've never found consumer VoIP terribly interesting. And Vonage has never been a company I've seen as a leader. Telco 1.1 mentality. Sure they brought VoIp to the masses, but the masses didn't care. The masses were buying dial tone. And speaknig of those masses, let's recognize that Vonage's entire customer base isn't a drop in the bucket when it comes to traditional telco customers. Vonage has been a gnat. Buzzing and sometimes annoying, but not threatening.

Vonage has never been anything but another telco. They just use VoIP instead of TDM dial tone, but telco, telco, telco. Not a hint of convergence or next generation services. Just cheap dial tone over different protocol.

Then there's Vonage's business model - hemorrhaging advertising dollars to maintain customer base. This was the approach they used before their miserable IPO failure, and it's what's been used to keep them afloat since. This isn't a business startegy. It's a delaying tactic at best. And the shareholders pay the price.

Now they're in trouble, but Vonage's troubles predate Verizon's court win. The trouble Vonage has is that they have demonstrated no vision, no leadership, no plan, and no path out. And I'm sorry folks, but shutter the doors, let it go and move on. Delaying simply adds to the ugliness, and to shareholder losses.

We might argue that Verizon is playing this out to scoop up Vonage's customer base for pennies on the dollar. I think not. That might be in the back of Verizon's mind, but given the proven history of hemmorhaging cash, I think Vonage will hold out to the bitter end. And I think they'll go to another bidder.

Whoever buys them is going to get a real deal, thanks to Vonage's own devaluation strategy. That's right, strategy. Through inaction, lack of foresight, failure to create a vision and march down the path out (and there was a time Vonage could have managed out of the abyss), their failure to plan has resulted in a de facto exit strategy of devaluation. The only question now is how low they'll drive the value of the company before they fold up.

The other interesting question is who will buy up Vonage's customer base, because that's the only asset of real value there is. I have no inside knowledge. Only conjecture. Several could play, but my current favorite to pull of the deal is Earthlink.


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