VoIP Inc.’s New Business Model

[excerpt]I’m really sorry about what’s happening to VoIP Inc. these days, reported by all the major blogs and webzines, thanks to the sequence of press releases that VoIP Inc. itself is issuing. But I’m concerned in particular for the impact that this story may have on the entire VoIP market. Rich Tehrani expresses similar concerns in this post.[/excerpt]

The whole story is well summarized here. In a nutshell, since in the recent past VoIP Inc. has been far from doing well (the graph down here is explicative) they are now trying to use one of the patents they have to start sueing over 100 companies in the VoIP space.

What impressed me most is that in the latest three press releases this fact has been explicitly declared, likely to give the shareholders a good news to let them digest the bad ones.

In the PR of Jan 23rd, they announce their proprietary click to call technology. In the news, here is the “I’m going to sue you” sentence:

The Company also believes that other parties are infringing on its intellectual property, which VoIP spent millions of dollars developing. As a consequence, it has retained a leading intellectual property law firm, to pursue damages against those parties infringing.

In the next one, dated Feb 5th, there is another “I’m going to sue you” sentence (just in case someone missed the previous one):

“There are many companies that are providing Pay-Per-Click advertising. However, after careful research and consulting with attorneys we believe we have the only patent in this space,” stated Anthony Cataldo, CEO VoIP, Inc. “We intend to aggressively pursue all infringers so that our shareholders can reap the benefit of the value this patent affords the company; additionally we believe that all providers of this type of advertising/technology are directly violating our patents.”

Last but not least, seven days after here is another press release, this time explicitly focused on patent infringement:

We have identified over 100 companies that have willfully infringed on our patents. We intend to stop the infringement and defend our technology and the patents behind it. These patents and the business they represent will be utilized to provide the shareholders with the value they deserve and have long awaited,”

My take is that this escalation of aggressive press releases is, unfortunately, the latest attempt from the board of directors to save this company (that is public) from a very sad demise. Today only, their stock price is losing 15% and the graph down here shows the story of their stocks in the past six months. If we look back at one year ago, its stock price was $8.40 while in Sept 2007 is around $1.5.

If we look at the whole story in the last 15 days, the picture is even worse. In the last three days the stock lost 50%.

What do I read from the PRs I mentioned above? “Dear shareholders, business is going very bad but we have a patent and we will try to make money by suing everyone”.

Ok, it could be seen as a new business model, but I don’t think the market is that stupid. They need to show business, prospect, new deals, a real strategy to compete in this crowded market. A patent is important, but the ability to survive in the market cannot be demonstrated through a “sheet of paper”.

I hope this story will offer a positive sign to the whole VoIP space in the following weeks, rather than another SunRocket. In the meantime, VoIP companies out there, watch out.

bankrupt, luca filigheddu, patent infringements, voip inc