Forget today is April Fools Day. Yesterday, and even before that, the sentiment around the Vonage IPO seemed to be swooning. I'm actually surprised and despite all of my prior skepticism around Vonage as company, all I've been hearing from people close to the brokerage business is that for months one of the most asked questions was "when will Vonage do an IPO?"
First, a strong Vonage IPO will be huge for the industry. It will cause more money to flow into the telecom sector and there will be a rekindled interest by all layers of the money supply chain.
But what happens with a less than stellar IPO? Probably not much because the cable MSO's are doing so well with VoIP they have rapidly become the VoIP story of 2006 not Vonage, just like Skype's sale to eBay was the VoIP story of 2005.
When I look at the moves Vonage is making I have to admit they're playing it very smart. First they keep growing their platform of customers. Second they have seen that 911 has been a trouble spot and they keep attacking it with some of the best 911 suppliers in the USA. Third they have invested a ton of money (some would say 60 million or close) to get 911 compliant. As important to all this, Vonage knows how to market and get customers. More than anyone else and without really changing their value proposition from when the launched. Lastly, their only real big spending threats, AT&T and AOL, both have gone to ground with their marketing of VoIP, leaving the roadway open to Earthlink, SunRocket, Packet 8 and Broadvoice and then a cast of small players, most of whom could be rolled up by Vonage very quickly. While Earthlink is a potential threat, their current focus makes them a looming one, not an actual day to day assassin.
In a nutshell Vonage is the big dog in the junkyard, the king of the mountain and the survivor in a game that has seen other take their shots, but in the end Vonage is still standing.. those reasons all make Vonage a company that's worth looking at.