First a lawsuit, now Vonage loses CEO

12 Comments

Michael Synder, chief executive officer of Vonage, came, saw and scurried away. Vonage chief executive resigned this morning, in what seems to be an un-ending string of bad news for the Holmdel, NJ-based VOIP service provider. Snyder was the CEO of Vonage for less than a year. He has also resigned from the board of directors.

Vonage Founder and Chairman Jeffrey Citron is going to take over as the interim CEO. Citron, cannot be CEO of a publicly traded CEO as part of a settlement with the Securities & Exchange Commission. The company is looking for a new CEO – not an easy task given the uncertainty around the company.

Vonage has been in crisis mode since it lost its patent case to Verizon, and a US Court asked them to stop marketing their service to new customers. They stay open for business after getting a temporary stay and are appealing the court’s decision that essentially will put them out of business.

The company is also undertaking a restructuring that is going to save $140 million in costs, of which $110 million will come from the marketing budget. No worries people – you will still see those annoying ads, for the company expects to have a marketing budget of $310 million. The company is cutting its work force by 10 percent.

The expense cuts are a move to appease the Wall Street, and also indicate the fight with Verizon and increased competition with cable companies is beginning to impact the company – and not in a good way. Vonage expects revenues of $195 million in the first quarter 2007, with net subscriber additions of 166,000 (21% year-over-year decline) and marketing cost per gross subscriber addition of $275. The company had 332,000 gross subscriber additions. That’s just WEAK!

Some believe that Snyder is the fall guy here, but I think it might be an exit of convenience. Vonage needs the street fighting skills of Citron in the battle for survival. Snyder may have wanted to get out of dodge. Stay tuned as story develops.

12 Comments

maria combs

vonage is not doing good,

staff are not there when you needed them, they always put you on hold on the line for how many minutes,or almost an hour,

one staff threat me ,, that if i ever file a law suit i will be paying more,

attention vonage ceo,

i am not happy for what the vonage did to me, i dont have a service for almost a month because my device got broke and it is not my fault why its broke , but still you charge me of one month,
i am asking them to discontinue the service but it is hard to talk to them about cancellation, they pass you to all the people in the office, but theres only one thing they wanted they dont want you to cancel, until they will not talk to you,
i am asking for the replacement first of my device, because how come they will keep on charging you without service, i dont have any intention yet to disconnect, until they told me that i have to pay for the device, which i dont, nned to, they need to replace it becuse its there device that is broke,
so he told me that they will send a new device but i have to pay for 97 dollars, which is shocking to me,

so i just told them to cancel the service because no way that i will pay that amount,he put me on hold again , after a while someone spoke to me again, and told me that i will not pay for the device unless i will send back the old one,

so i agreed, i keep on waiting for the device to come, but nothing after a week they sent me 2 e-mail informing me that i have already recieve the device ,, abnd if i failed to return the old one they will bill me 97 dollars,i called right away telling them that i dont have the device, they insist that the carrire just left the device in front of my door,
the real thing they did not send anything, just to lied to me,,
i called and called again and informing them that i dont have the device, this time they told me that they will send again, but i have to give another card number becausse they cant access to my account, this time i told them just to cancel again the service, but they told me in order for them to cancel my account i habve to pay the 19..45 dollars of my bill which i did not use, so i told them i will give another number of my card, but i have to call them back and i am asking how to get them easy, they gave me this number as a reference number fpr easy access,they said,,16900911,,so i paid my bill and gave them another number,, and i went back to the phone to call again, but to my surprise i cant get through, how many times i tried and tried its not going through, i was so frustrated, because i really want a cancellation, i am not happy paying that monthly bill for which i am not even using the said bills,

then i called again the customer service ,this time they want me to wait for at least 25 minutes so i hang up, until i decided to call again and waited for a long time almost an hour in the phone,

so a woman answer me and i told them that i been sending my payment and wanted a cancellation,because they promise me that i soon as i paid off my bills they will cancel there service, but again the keep on holding me on the phone, for long time , and again a woman was on the phone i am again asking her for cancellation, which to my surprise they still kept on giving me optio, which they know i dont have the device, i am even begging them because i am already tired and i have some works to be done which i cant do it because i was on the phone for a long time,

then they forward me again to a woman which i was again telling her to cancel, at this time she told me, that they they already pull a 97 dollars amount from my credit card, whic they did not told me about , because , i told them how they did that that they said that the device is free, as long as i return the old one, and how can i return the old one that they did not even send me anything, i was on there bait, they get money from my account without asking me,,or giving me notice, they just get it without my knowledge,

so i was so mad, shock of what they did, i paid already for that month for my bill just to disconnect,

and she told me that she cant cancel my account until january 28 2008 , i am confuse, because they said that they are proccessing to return my money,
and how come they cant cancel it,,
to steal money again from my account?
and one of the staff , a woman that i talk to treathen me that if i will sue the company i will pay more,,( if you will try to sue us you will pay more ) thats what she said with a threatining voice,, and she said even if i will write to there main office nobody will listen to me,,

is that a good company? i was on your company from dec, 2005, i just want to cancel it due to a reason that you did not give any action for my problem, and it is not my fault that you still charge me for the month that i am not using the service,

and for that woman that threaten me, its not good because its the custoimers right to cancel the service because i am not using it anymore, not that you have to threaten me,

and for that money that you pull from my account i hope someone will help me because its not right for anybody just to get money from somebodys credit card without permission,,

attenttion VONAGE CEO AND TO THE STAFF OF VONAGE

MARIA COMBS,,,

jpmarie05@yahoo.com

VoipFroig

Sip based voip is not in trouble…its the analog to digital sectors that will have these issues…if Vonage would switch to a sip based platform they may be able to stick around a while. The Sip platform is newer and Verizon has not and will not have any patents on them…in fact Sip based platforms came around in the early 2004 on public level. The SIP platform gives more features then Vonage can offer…In fact that’s why you have IP based POBX platforms which are hosted by private companies or individuals who own the equipment and only lease the traffic….You will see the rise of SIP based companies and they will not only dominate the telecom sector they will also push into the cable companies as well…My company offers more then Vonage can for less and we have a fraction of the operations cost as they do….

David Yost

I have presently been paying Verizon $80.00 per Business line, $160.00 for the two I have.
Now I am paying $40.00 total for two lines, saving me $120.00 per month.

I have had no trouble with Vonage service except for the overseas customer service. But, with a savings of $120.00 a month I can put up with a little inconvenience!

julie

Vonage is a distaster! The service doesn’t work and their customer service consists of overseas representatives with a series of scripts that allow for no thought. They have no respect for customers that have been duped into believing their catchy advertising. This company absolutely deserves to go down! The way they treat customers will/is getting around and that’s going to be their downfall if the lawsuit decision is reversed.

Steve Morsa

Oh, alright, Jeffery, you can quit your begging…for a couple mil up front (no stock options needed…or wanted), I’ll be the CEO of your sinking ship…which I’ll package up and sell off to Verizon or one of the other incumbents…while there’s still something worth selling…

Patricia

What’s disturbing to me about all of this is that the big carriers are all pushing hard now to do voip (among other things), coincidentally as Vonage starts getting beaten into the ground in every direction. There haven’t been many cases of VoIP blocking in the U.S., but I personally think we’re watching a corporate take-down of a competitor. There haven’t been a lot of cases of VoIP blocking in the U.S. but it has happened and that combined with what we’re seeing with Vonage is a little scary.

SIP based VoIP is linked to the PSTN so that patent lawsuit would apply to everybody playing in SIP-based VoIP, no?

You can bet that vendors are hustling to work around it.

Moshe Maeir

As I have written on my blog – http://www.flatplanetphone.com/wordpress
Too little. Too late.
Vonage should take a 3 step plan to make the company immediately profitable
1. cut advertising completely,
2. improve customer service
3. solve / license the patents

stock will double and then Citron can sell out.

Om Malik

Fall guy – i read that on another blog. I think he decided to jump ship before it was too late.

RandomThoughts

Fall guy? Well, at least the fall wasn’t from very high.

Vonage’s only option is to find a buyer. That really was the case even before the lawsuit. Their business model just doesn’t work. Unable to bundle services, competing with big players while having to use those competitors networks, pushing an inferior product (Vonage VoIP over public internet vs. MSO VoIP over proprietary network) and new regulatory requirements? Now, the only hope is to find a buyer.

Not sure who would step up, I would doubt Verizon will, because I can’t imagine current Vonage customers like Verizon all that well. Plus, I think Verizon wants to kill Vonage just to watch it die.

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