It's the platform, stupid

Danny Briere, CEO of TeleChoice Inc., a consultancy in Mansfield Center, Conn., agrees. "The business foundation for Vonage is a failed premise. You don't found a company on a technological advancement you don't wholly own."

That delivery platform has put Vonage, which charted $269.2 million in revenue in 2005, in the news this month, as VOIP technology patent holders Klausner Technologies and Verizon Communications filed lawsuits against the company for infringement. Vonage scrambled to fight back, announcing it had acquired three VOIP patents from Digital Packet Licensing Inc.

Paulak said Vonage faces other significant problems because its services need carrier networks for delivery. "The company relies on too many other factors to be successful, including someone else to provide the broadband connection," he said.

Stofega pointed out this is a catch-22 for the company. "One of the things that came out of the technology bubble bursting is that everyone can't go around and build their own network," he said. "Networks are resource-intensive and expensive. No one can afford them. However, if, like Vonage, you don't own the network, then you have a problem. You have to buy capacity and transit from the long-haul carriers. The irony of this is often lost."