Tuesday, August 30, 2005

Breaking News: Vonage Nears IPO

It's been a good summer for IPOs.

And the party has just gotten started.

Vonage Holdings will to file to go public sometime this week, if not next week.

Vonage offers voice over Internet protocol, or VoIP, which is regular phone service through broadband Internet connections.

Customers can make unlimited calls for a flat fee of $24.99 a month.

According to sources, The firm's financials aren't public knowledge, but subscriber growth has been impressive.

UBS Securities estimates it may have 3.5 million suscriber lines by 2008.

We'll see.

Vonage's market has low barriers to entry.

"A small firm could come up with a revolutionary technology that takes all the glitches out of VoIP," said one expert.

Even more, Google came out with Google Talk, an instant-messaging service, so Vonage could face tough competition soon.

We think the IPO will raise at least $500 million.

Vonage shares will pop then sell off as investors realize competition is too stiff.

Skype! is a top rival of Vonage -- as we said on numerous occassions, we believe Skype! will be acquired soon enough.

Selling the company to a top player (like Murdoch's Fox empire?) will present a better exit strategy for the founders than going public and getting entangled with Vonage and a legion of VoIP parasites.

Now you know why I hate telecom.

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