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Building value for VoIP investors
VoIP might be a good business to be in, but it might not be such a great business to invest in. Although Skype's metrics are good--more subscribers are paying more money each--the numbers are small. Skype brought owner eBay 30 cents per subscriber last quarter; eBay's core auction business netted $5.64 per subscriber. And when Vonage reported its most recent quarterly results, its stock sagged 9 percent, even though the 42-cent per share loss was in line with expectations. The trouble is that it's costing Vonage $579 to gain each new customer, up 65 percent in six months. That's the wrong direction on a trend line.
For more on VoIP as an investment:
- read this article from The Street
Comments
Posted by Nizar Virany | February 23, 2007 - 9:42pm
It costs vonage $579 to get each additional customer. This is where there marketing is an utter failure. Vonage should learn from cell phone companies and let small businesses market there product in the malls like the cell phone companies did and the pager companies did earlier in the U.S. market.
I am sure they can easily reduce the amount of $579 down to $450 if they were to start marketing via small businesses.
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