IP Phone

Looking To Invest In IP Voice: Stay Away From Vonage, Look At eBay

Vonage's (VG) woes continue as detailed in Barron's Follow-Up column this weekend. The stock is currently trading at $5 per share down from its $17 offering price.

The article cites the lack of triple-play offering -- voice video and data -- that the cables can offer and that the baby bells most likely are heading towards offering. However, from this Fly's perspective, the real play in voice over IP could be with Skype, which is owned by eBay (EBAY).

eBay completed the acquisition of Skype during the past year which is now part of its Power of 3 strategy -- marketplaces, payments and communications.

While the cable companies are adding hundreds of thousands or millions of customers, eBay has over 171 million customers around the world. Skype now offers phone numbers that work through your PC. In addition, there is, although it is still expensive, a Skype USB port phone that is wireless so you can walk around with your Skype device in your home.

Skype will be charging for services that go into public-switched networks, but the cost is virtually nothing when compared to cable and the baby bells.

eBay said in its year-end conference call that it is still figuring out the best way to monetize Skype. Any way it does it, it will be a lot cheaper and more profitable than any of its competitors.

February 13, 2007