VoIP Provider Vonage Planning IPO?

SixDimensionalArray writes "The rumor mill is exploding with stories that large voice-over-ip (VoIP) provider Vonage is planning an initial public offering to raise nearly $600 million. This information is interesting coming out not long after Google's recent release of Google Talk, which overs instant messaging/VoIP services PC-to-PC as well as a surge in marketing by VoIP providers such as Covad and Skype. Could this be yet another bubble?"

Comments

Is VoIP Reall That Big?

[TheComputerMutt.ca]

I know that it's a growing market, but with the afforability of cell phones and free PC versions, is there really a large enough market to sustain all of this?

Re:Is VoIP Reall That Big?

[w98]

I use Vonage and love it ... I have a virtual phone number based in Toronto that my family can call and it forwards to Los Angeles at no extra charge. On top of that, the feature to forward to another phone number (ie: my cell phone) for free if I'm not home to answer it there, is well worth the price. Between the cell phone and Vonage, I have no need for a land-based phone line any more to talk to my family up north. Cingular charges me $0.69/minute to call Canada, so I just call my family and say "hey, call me back on my Toronto number" and wait for my cell phone to ring.

TechCom and the future

[LordKazan]

I heard a story on NPR about VoIP just this week and they talked to a guy from a company that specializes in tech investments - specifical in figuring out what is a good investment.

He said they refer to technologies like VoIP as "TechCom" and fully expect it to replace Telecom as time goes on - and the market of incompatable technologies is just because the technology is in it's infancy [VHS vs Beta, Laserdisk, VCD, DVD, Blu-ray vs HD-DVD would make a string of good examples] and that overtime they'll eventually all become cross-compatable.

He pointed out previous advances in communications technology anymore - specifical AT&T - anyone remember what the second T is? American Telephone and Telegraph - who uses a Telegraph anymore? Exactly: NOBODY.

VoIP is the infancy of the next generation of communications technology - not a bubble.

They want to raise too much, overpriced

[John Seminal]

Vonage wants to raise $600,000,000? But they only have 800,000 customers. That is $750 per current customer? Can Vonage even make that much per customer? What growth do they expect?

To date, the company has raised more than $400 in venture capital

They way I understand, VC will own most of the company. How much of a % ownership did the $400 million buy, and how much of a % ownership will the $600 million have? Are the VC cashing out? This is the stage of the game where they normally do. And I would like to know how much influance the VC has, did they strike a deal with the original investment that the VC has control of when the company goes IPO?

There was a great movie about how VC ruined a company, the DVD is called startup.com. Some very smart guys came up with a great idea. They did all the work, but needed funding. They found VC, and had a big party, they took all their employees on a vacation. Then they realized how much control the VC had. The VC ran the show. The VC fired one of the founders, the guy who was the technical mastermind. It was a nightmare what they did. And the company eventually went bankrupt.

This seems like a bad deal to me. As others have pointed out, cell phones are getting cheaper all the time, and now there are free VoIP services available.

I just can't see how this kind of company could get a billion dollars. It is like we are living in 1999.

Phones that can crash? No thanks

[Bin Naden]

Who seriously wants a phone system that can crash? Damn, I'm trying to call 911 for that heart attack but my phone does not work. I'd wait before joining VOIP service.