Saturday, March 24, 2007

Vonage: Hello? Hello? ...Update with Good News

Vonage service to go dead in 2 weeks?

According to an 8-K filing with the Security and Exchange Commission, VoIP Inc. says it has entered into a two year deal to provide Vonage what it needs to get around the jury verdict. This should satisfy the court on one of the three counts of infringement and keep it from shutting them down. Vonage is denying that this is related to the Friday's upcoming meeting with the judge and are standing by their pledge to keep the service up and running.

Beloved by expats and international travelers, the already money losing Vonage lost in a jury verdict for Verizon which claims that Vonage has been infringing upon their patents and using them to take more than 1 million customers away.

The jury put a dollar figure on the harm suffered by Verizon...

...but Verizon doesn't want the cash; they want Vonage to stop.

The judge approved the Verizon request that could make Vonage lines go dead but said he won't sign the death warrant until a meeting with the companies in two weeks. Vonage has requested a stay.

Vonage says they are confident that they will come out of that meeting with an additional 120 days to appeal the jury's ruling.

But analysts are not so sure. Bloomberg is reporting,
"My impression is they have to shut down'' if Vonage can't develop a way to link calls that replaces the one that violates Verizon's patents, said Clayton Moran, an analyst with Stanford Group in Boca Raton, Florida, who covers Vonage. "That's obviously disastrous.''
The report goes on to say that Vonage is working on "technical work-arounds" that will avoid using the Verizon patents. A company spokesman says, "We are confident Vonage customers will not experience service interruptions or other changes as a result of this litigation."

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