Comments on: Finally, A Vonage IPO http://www.markevanstech.com/2006/02/08/finally-a-vonage-ipo/ Insight and Analysis from North of the Border Fri, 21 Nov 2008 20:47:31 +0000 http://wordpress.org/?v=2.6.1 By: Stuart MacDonald http://www.markevanstech.com/2006/02/08/finally-a-vonage-ipo/#comment-1067 Stuart MacDonald Thu, 09 Feb 2006 15:55:45 +0000 http://markevanstech.com/?p=1302#comment-1067 Now that I can actually see that they are essentially running marketing spend at 100% of gross profit, I am feeling a little better about them spending that much. But only a *little* better. It's not 150% or 300%, which is good. But, if they are being forced to spend at that level to attract customers *now*, God help them down the road. Why? Well, once you start to see more action from the natural players in the space, the phone and cable companies (who also have a built in cost advantage if they want to play it), the big portal folks with a monster communicator install base already, and other new entrants with high expectations (I mean, unless you think eBay's buying Skype was just pure folly they *have * to be getting set to do something) it is going to become *more* expensive to attract customers, not less. No wonder they are looking to IPO now... -- Stuart Now that I can actually see that they are essentially running marketing spend at 100% of gross profit, I am feeling a little better about them spending that much. But only a *little* better. It's not 150% or 300%, which is good. But, if they are being forced to spend at that level to attract customers *now*, God help them down the road. Why? Well, once you start to see more action from the natural players in the space, the phone and cable companies (who also have a built in cost advantage if they want to play it), the big portal folks with a monster communicator install base already, and other new entrants with high expectations (I mean, unless you think eBay's buying Skype was just pure folly they *have * to be getting set to do something) it is going to become *more* expensive to attract customers, not less.
No wonder they are looking to IPO now…
– Stuart

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