VoIP provider Vonage Holdings Corp. (VG) on Thursday reported a profit, but before investors get too excited (although it’s too late for that – Vonage’s stock skyrocketed for the first time in a long time on the income news), it’s important to note it was a fluke.
The profit stemmed from a one-time gain. On the books, that meant Vonage made $5 million in the first quarter of 2009. Without that piece of luck, though, the company actually lost $7.7 million.
Further, Vonage lost subscribers – 6,000 net, in all. That’s a big deal in the midst of a recession when people are looking to cut costs. And that’s been Vonage’s value proposition all along – to save users money. But the provider increasingly has faced competition from cable operators and telcos that bundle VoIP into their packages. Which raises the question ... how much longer can Vonage sustain its single-source business model?
