Vonage struggles after showdown with Verizon

By Justin Mann on August 9, 2007, 12:18 PM
Vonage has pulled few fast ones the past year or so, fight off Verizon's attempt to shut them down due to copyright infringement. Through several victories, in court and otherwise, they managed to find a workaround for the infringement and stay an injunction against them.

Despite their fighting, however, the company is facing slow growth, which they attribute to the cost and legal issues of fighting Verizon:

Vonage said Thursday during its second-quarter conference call that it has completed the necessary work-arounds for the Verizon patents that a court found it infringes, but the legal drama has cost the company dearly in terms of recruiting new customers.
Obviously, Verizon's PR and other coverage of the battle could have easily swayed many people to opt for another solution. A reduced advertising budget and likely steep legal fees amplified this, and as such they are still losing money.

Service quality is also apparently an issue, with the article citing that 70% of the customers who leave Vonage do such because of poor service. Their legal victories will mean very little if they go out of business.




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