"Vonage has had serious problems. It's a shame; they could have done a lot more. They just haven't been able to execute as well as they should have," said William Stofega, research manager for VOIP services at IDC in Framingham, Mass.

Stofega is not alone in his harsh criticism of the Holmdel, N.J.-based company, which was founded in 2000 and provides fixed monthly fee-based broadband phone services to more than 1.6 million subscribers. Founder, Chairman and Chief Strategist Jeffrey Citron and his executive team are accused of poor decision-making, which experts believe has led the stock to tumble from its IPO debut in May of around US$17 to just below $7 this week.

Shareholders, feeling similar frustration, filed two class-action lawsuits in June against the company, alleging, among other things, that certain facts regarding the Customer Directed Share Program were omitted or misstated and that the IPO prospectus contained misrepresentations or omissions concerning Vonage's products.

"Vonage is a great case study of how you can have a great service, but a terrible stand-alone product," said Eric Paulak, managing vice president of network services and infrastructure at Gartner Inc.

Paulak said the writing has been on the wall for Vonage since its early days. "You can't ask what went wrong. Nothing suddenly went wrong. Vonage has had problems since Day One," he said.