- Over the past few days, I have received calls from a number of shareholders who expressed concern about 8x8 and the future of the VoIP industry," Martin begins. "I would like to take this opportunity to comment on some recent events in the VoIP industry and at 8x8, Inc., which I believe have unjustifiably affected 8x8's stock price and valuation. [Ed. note: Silly shareholders. How dare you worry about your investments like that!]
The main point of Martin's letter is that the 8x8 shouldn’t be punished for Vonage's problems. (See Vonage Gets a Haircut.)
“We think it’s had some effect, and we felt the need to let it be known that our offering is different than theirs, and we’ve got a different business model that is much more conservative,” says 8x8 spokeswoman Joan Citelli.
Martin takes pains to point out that 8x8’s services are more diverse than Vonage’s residential VOIP offering. 8x8, Martin says, has a business in hosted IP voice for businesses and offers a videophone product -- all built on home-grown technology.
"We remain extremely judicious about our customer acquisition costs," Martin writes in a jab at Vonage. "We have absolutely no intention of competing with nonsensical consumer promotions and advertising whereby customers added will never be considered profitable subscribers."
Vonage's customer acquisition costs were almost as much as its total revenues during 2005, according to SEC filings, and are showing no signs of slowing in 2006.
The Vonage IPO is just one of a few factors making it a long, hot summer for the pure-play VOIP crowd.
The VOIP providers were given news earlier this month by the FCC that they would be paying more into the Universal Service Fund. (See FCC Dials VOIP for USF.)
The firms also have seen hopes for tough network neutrality legislation dashed first in the House, then in the Senate. (See Net Neutrality's End Might Turn a Buck.)
"When you add up everything that's happened with the Vonage IPO and some of the legislative and policy happenings including the USF decision, and net neutrality, it's been a tough month," says Brian Lustig, spokesman for SunRocket Inc.
"In terms of the overall market, I think he's just trying to remind folks that there's still some positives out there," Lustig says of Martin's letter to shareholders.
— Mark Sullivan, Reporter, Light Reading