Jajah buys Vonage

Pat "Scoop" Phelan says he has multiple sources confirming that Jajah has purchased Vonage and will be creating a new Ireland-based company tat at the outset, will have four million users, making it, by far, the largest of the new telephony companies that I classify as "cheap talk."

I'm not so certain if the talk will remain as cheap as it has been for Jajah.  The Mountain View-based privately held acquiring company is rumored to be losing significant money even as it continues to grow. Vonage, as you probably know, just got clobbered in a $200 million patent infringement suit.  The publicly held company has been bleeding money throughout its history.

There are smart people behind this deal and I am not privy to what they are up to. At this point, in a fast-emerging disruptive industry, it is wisest to go for position over revenue.

At the same time, I'm reminded of an old Jewish joke about Abie, who owns a shoe store.  His pal Hymie comes in to visit and asks how business is. "Awful," he says, "This price war with the guy across the street is killing me. Every time I sell a pair of shoes, I lose $10."

"So," Hymie asks, " Why don't you raise your prices by $15 a pair."

Abie stares at his friend in disbelief. "What, and lose the volume?"

The new company has volume, position and momentum.  All it needs now is to determie a profitable business model.











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