What comes next for Vonage...financial troubles lead to departure of CEO followed by retrun of founding CEO. Vonage isn't ENRON but the following quote from a MARCH 11, 2005 Business Week interview with CEO Citron (pre-IPO) when things were still rosy has that Enron-quality of wishful thinking.
"Q: Is the company profitable?
A: It depends on how you look at it. Clearly, we're spending more on marketing than we earn in free cash from the existing user base. For quite some time now, we've been generating free cash from the existing user base, and significant amounts of it. We take that cash and invest it in marketing to get new customers."
It's basically a legal quasi-pyramid scheme...Use current subscribers $ + invested $ to get more customers...(in other words, new customers keep things running for the existing customers.) Unfortunately, those early adopters are getting harder to find and the cost is getting bigger. Oh well, sometimes we're the bug, sometimes we're the windshield. The court order banning new customers is now a tad moot...why would anybody sign up with a company heading for the exits???
Subscribe to:
Post Comments (Atom)
1 comment:
yeah, vonage is doomed...
Post a Comment