Vonage chief stays sunny about the future
NEW YORK -- "Things are going very well," Citron says.
Ticking off a list of financial achievements — including 22 sequential quarters of revenue growth — Citron says he's more hopeful than ever, in fact. "I'm very encouraged about the future."
The future might look good, in part, because Vonage's recent past has been so bleak.
All the pain has showed up in Vonage's stock price, which is currently trading at about $2. That's an almost 90% drop from its IPO price of $17 in 2006.
Citron recently talked to USA TODAY about his plan for rejuvenating Vonage and about his company's legal battle with Verizon. That fight tested Vonage's mettle as well as its core business plan: using VoIP — short for Voice over Internet Protocol — technology to draw customers.
Sally Cohen, a Forrester analyst who tracks the telecommunications sector, says Vonage is the dominant company in VoIP. But she also thinks that might not matter over the long term, given the precarious position of the VoIP sector in general.
Thanks to the entry of big cable and phone companies, VoIP is quickly turning into a giveaway product as part of a larger package that also includes wireless, video and high-speed data. That could make it hard for stand-alone VoIP companies such as Vonage, she says.
According to Forrester, 38% of consumers who use online services have never heard of VoIP; another 43% are familiar with the concept but have no interest. "This market has a lot of growing pains, not just Vonage," she says.
Grabbing a small piece
Citron says his plan for reviving Vonage can be boiled down to one word: "segmentation." In the USA, he notes, there are more than 100 million homes and 30 million small businesses. The way Citron sees it, Vonage only needs a small piece of those markets to be financially successful. "That's our target market."
Popular Reads
ABC News Live