Sinking Vonage Ship Throws Captain Overboard

from the trying-to-turn-it-around dept

Regardless of how Vonage’s legal problems play out, it’s pretty obvious that the company’s short time as a publicly traded entity has been a total disaster. Even before the whole patent infringement mess, the company was hemorrhaging cash. So it’s no surprise then that the company has announced the departure of its CEO, Mitch Snyder, who will be replaced by founder Jeff Citron on an interim basis. The company says that Snyder resigned, although that almost certainly means he was fired, given how abrupt the move was. Already, Citron has announced plans to slash rates and cut marketing spending, while promising investors and customers that the company is pursuing a technological workaround so as to avoid infringing on Verizon’s patents. All of these things are good, although it’s not clear that any of it will be enough, as the company faces stiff competition and an inexorable trend towards free voice communications. The other interesting angle to this executive switch has to do with Citron’s earlier settlement with the SEC relating to his former company, Datek. The widely believed, though unconfirmed, rumor is that Citron is enjoined from running a public company, which is why he had to give up the CEO job before Vonage became public. The fact that he has been named CEO, but only on an interim basis while the company searches for someone new, doesn’t really do much to clarify this question.


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Comments on “Sinking Vonage Ship Throws Captain Overboard”

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14 Comments
angry dude says:

hell with vonage

What did you expect from a company with zero R&D and zero IP assets trying to make it big in the patent-heavy and extremely competitive industry.
Vonage didn’t even bother to research the key patents and to aquire some of them from small outfits and independent inventors.
All they have is 3 stinking patents aquired from some outfit.

Hell with those guys, they are all scam artists starting with their CEO.
Poor Vonage investors

AMP says:

Contradicting strategies?

Aren’t their decisions to:
1. Appeal the court case, I thought I read somewhere that they were appealing the lower court’s decision, implying that they do not believe that they are infringing on patents

2. “pursuing a technological workaround so as to avoid infringing on Verizon’s patents” seemingly an admission that they ARE infringing on Verizon’s patents.

Contradictory statements? Or am I misunderstanding the situation?

B's Opinion Only (profile) says:

I think Vonage is quietly implementing its patent-workaround. If you look at the Vonage customer message boards, there have been rotating outages for an hour or two in each market, starting about 3 weeks ago.

This would presumably be long enough for them to switch over to the non-infringing technology.

Besides the short outages in the last few weeks, I have had flawless service from Vonage for 2 years now. It’s good and it’s cheap. 39.95 a month gets me services that would have cost about 150 from Bell!

Angry dude, a lot of very large companies don’t own patents. Service providers typically buy gear from manufacturers such as Cisco who own the actual IP. You don’t have to buy Boeing just to fly in one of their planes!

Dam says:

Vonage Is The Sacrificial Goat

It seems that whenever there’s been a new technology appear on the market, the first business always seems to die a slow death. Anyone remember Visicalc? How about Northpoint?

Vonage was the first consumer VOIP provider, I think, and through their goofy commercials, VOIP has nearly become a household word. Yes, they will probably go down in flames, but they will have paved the way for successors who, hopefully, will learn from Vonage’s mistakes.

By the way, Visicalc was the first spreadsheet application, succeeded by Lotus 1-2-3. Northpoint was a major player in the low priced DSL market back in 1999 and 2000. Both companies were early in their respective games, and both died away. Visicalc at least made a lot of money, but couldn’t keep up with the fast moving (read:Microsoft) market.

Lanboy says:

The verizon patents are bs

@AMP

This is legalese for 1) The patents are ridiculously broad, with no verizon innovation, tons of prior art, that define pretty much any VOIP implementation, developed in a a lab with off the shelf software provided by VOIP vendors using standards based products. Obvious to an expert is a rather huge understatement of the verizon patents. 2) but if you want to pretend they are valid patents, we’ll pretend to change our implmentation to avoid “Verizon’s Intellectual Property” .

I shit you not, I know the guys on the patent, and they were working with SONUS, and patented crap because they could. They have a patent for freaking test servers which involves having a linux box in a vlan.

RandomThoughts (user link) says:

Alex, very funny, made me laugh.
NoTo, only 2 commas for his check? That wouldn’t be very good.

Vonage was dead before the lawsuit. It was a zombie. Someone forgot to bury the body. Think about it, Vonage was fighting in a market against huge competitors for a product that had become a commodity.

And no, Vonage was not the first VoIP company.

angry dude says:

Re: Its too bad

“Its a crying shame that Patent holders arent legally required to enforce their patents 100% or risk losing them like trademarks”

NO, it is NOT, if you take a moment to think about it.

If you are a patent holder, how the hell are you supposed to know that someone out there is infringing on your patent ?
Do you expect the infringer or someone else notify you about infringement ?
Just give me a break…

Patents are not like trademarks, and for a good reason…

Nathan says:

One...or the other...???

I have a conundrum here:

We use Vonage for three VOIP lines our home-based business as well as the main house number.

We also use a Verizon cell phone.

My question is this: what happens if Vonage wins? (my cell rates will probably go up)
What happens if Verizon wins? Our VOIP lines vanish. Who else is there that does this for the price we pay? Obviously, we will have to pay more again because we will be forced to go with Verizon and pay more (becuase they will still probably jack up the rates)

Either way, we (the customers) are getting screwed. Why? This is corporate America. It’s the American way!!

Bull. We might as well sell the naming rights to the country. I see this as another way that the country is run by the companies trying to make a fast buck or trillion. They don’t care. Corporate greed is getting out of control.

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