Summary:

Paul Kedrosky, a professor at the University of California, San Diego says that the recent $200 million venture capital infusion into Vonage is nothing but great expectations. He believes that Vonage’s valuation is at a point, where it would need a king of fools to bail […]

Paul Kedrosky, a professor at the University of California, San Diego says that the recent $200 million venture capital infusion into Vonage is nothing but great expectations. He believes that Vonage’s valuation is at a point, where it would need a king of fools to bail out the investors. “It’s hugely optimistic,” Mr. Kedrosky told the times. He added that the amount meant that any initial public stock offering for Vonage would have to raise at least $3 billion to justify the latest round of financing. Sandy Miller of 3i, that pumped in another $10 million in this round, discounted all plans of an IPO. he thinks this is nothing but a slam dunk. But that’s not what the other Times VoIP story of the day says. At their current rate, the cable companies may soon eclipse the market leader, Vonage, which has 600,000 subscribers. “Brand has everything to do with it: long-term stability, willingness to stand by the product, quality of product,” Steve Kirkeby, a telecommunications analyst at J. D. Power & Associates, said of cable companies. (NYT)

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By Om Malik

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