The beginning of the end for Vonage?

Posted by Tracy Coenen on April 6, 2007 · Leave a Comment 

A judge has ruled that Vonage Holdings Corp. has to stop signing up new customers on April 12! Vonage has been relying on quick growth in adding customers (currently at 2.2 million) to try to become profitable. It hasn’t happened yet, and now they may be doomed.

The judge says Vonage has to stop signing up customers as long as it is infringing on patents held by Verizon Communications Inc.  In a jury trial a month ago, Vonage was found to be infringing on Verizon’s patents related to Internet calling – specifically dealing with connecting Web calls to regular phone lines and certain calling features like call forwarding.

Vonage is currently trying to develop workarounds for their service which will not infringe on the Verizon patents, but nothing has been rolled out yet.

Vonage is appealing the decision the company is infringing, but  the judge is requiring Vonage to put up a $66 million appeal bond.

One investment analyst said that Vonage will not be able to continue doing business in a “viable way” without signing up new customers.


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