Dead Cat Bounce

On Friday, Vonage lost yet another court ruling in its ongoing fight with Verizon, in this case an injunction against operating its service with the infringing patents.

Larry Dignan of ZDNet does a good job of summarizing the issues facing Vonage, while Eddy Elfenbein of Seeking Alpha is ready to pull the plug.

The stock was up slightly today (but of course down 25% on Friday after the news). Perhaps it’s because, as one blogger notes, the injunction won’t be enforced for two weeks. I personally think it’s a dead cat bounce.

Dignan’s online poll asks who will get the business that Vonage loses. One option is to shift demand to other VoIP suppliers. I can’t see how this is a positive for the other VoIP startups, since clearly Verizon and the other Baby Bell are only interested in putting competitors out of business. It may be that the only viable competition comes from P2P services like Skype or A/V instant messaging clients that bypass the PSTN entirely.

Technorati Tags: Baby Bells, patent infringement, Verizon, VoIP, Vonage