Fergie's Tech Blog

Vonage in Crisis

Cassimir Medford writes on Red Herring:

Internet telephony market leader Vonage on Thursday said chief executive Michael Snyder stepped down and announced it would slash costs in a bid to turn around its struggling business.

The Holmdel, New Jersey based company, which recently lost a critical patent dispute with Verizon Communications, said company founder and chairman Jeffery Citron would take over as interim CEO.

Vonage said it was cut its crucial marketing expenses by about 25 percent, and administrative expenses by $30 million. The moves come less than a week after a federal judge banned Vonage from signing up new customers, a major blow to a company that operates on very thin margins, an analyst said.

“This is a really bad time for Vonage because it now has to survive on less money,” said Yankee Group analyst Zeus Kerravala. “Can they survive running lean and mean? The jury is out on that.”

posted by Fergie @ 4/12/2007 12:05:00 PM