Vonage IPO?

BusinessWeek has jumped into will-they-or-won't-they arena when it comes to an IPO by Vonage, which has raised more than US$200 million in venture capital. According to the magazine, several VCs believe Vonage will go public this year but investors could be spooked by Vonage's less than stellar retention rate. In a recent posting, Om Malik wrote that Vonage is adding 10,000 new subscribers a week, and it has surpassed 450,000 customers. The company has made it clear its subscriber target for this year is 800,000 to 1M.
For those you who read this blog, I'm in the camp that Vonage could do an IPO that would give a market capitalization of more than US$2-billion based on how publicly-traded rival 8X8 Inc. is currently valued. As someone who reported on the dot-com boom and wrote far too many stories about twenty-something billionaires, I'm as cautious as the next guy when it comes to touting IPOs of emerging technology companies. That said, Vonage has subscriber momentum and investors like nothing better than a sexy story involving a business they can sort of understand. Before anyone gets too carried away, it should be noted that Vonage may be bleeding badly given how much it's spending on marketing to attract subscribers, and competition will intensify in a big way when the carriers and cablecos get really serious about Internet telephony.