The multimillion dollar judgment handed down this week against Vonage in a patent infringement case brought to court by Verizon adds to the VoIP carrier's financial challenges.
The company owes $58 million in damages plus 5.5% royalty rates for future use of Verizon technology, a federal jury has ruled.
That will be another drain on the company’s already negative cash flow. The company’s net losses in 2005 were $261 million and rose to $286 million in 2006.
Not all the financial news for Vonage is bad, though. Its revenue jumped from $269 million in 2005 to $607 million in 2006. And it landed 955,000 new customers in 2006, paying $248.51 on average in marketing costs for every new customer it signed.
About 75% of its customers are residential and the rest are small businesses, the company says.
But whatever progress Vonage has made doesn’t seem to be impressing Wall Street, as the company’s stock price has steadily dropped over the past year from a high of about $14 to the current price of roughly $4.50.
Vonage says it will appeal the verdict in the court case.
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Comments (5)
Verizon's actions sound like the old cattlemen's cartel in WyomingBy Anonymous on March 12, 2007, 11:54 amRather interesting that a "how to" specification covering interoperability with the PSTN can be patented. One would have thought the 1996 TA would have regulated...
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What's new here?By Anonymous on March 23, 2007, 5:42 pmSo basically they are patenting the concepts behind everyday PSTN feature functionality as applied to making them work with existing Internet technology? I love...
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INNOVATIONBy Anonymous on March 29, 2007, 8:26 amAgree 100% There is nothing new in the "patented" concepts claimed by Verizon. Looks like the new fashion is trying to beat competitors out of the telecommunications...
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Mature industryBy Anonymous on April 8, 2007, 9:55 amVerizon is a dominant member of a mature industry. They (AT&T/SBC/Ameritech/BellSouth/etc. and Verizon) will protect their businesses through the means they have...
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Vonage VS VerizonBy Matt Alley on October 10, 2007, 9:58 pmWhat a joke! Verizon crying over a little competition; Last time I checked competition is what makes for better services and products. It sad when companies buy...
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