Vonage CEO resigns, deathwatch starts

Vonage Holdings Corp. (NYSE: VG) Chief Executive Michael Snyder has resigned and was replaced by founder and chairman Jeffrey A. Citron. The company also announced it was slashing jobs and marketing costs. Plus, it announced pretty dismal preliminary earnings.

Let the Vonage deathwatch begin.

Snyder came to the company because Citron's past run-ins with the SEC made some investors uneasy. Vonage mentions that Citron will only have the job on "a short-term basis" while it searches for a replacement. Masochists are welcome to apply.

Vonage also is freezing hiring and plans to reduce its workforce by 10%. In addition, the company also will slash SG&A expenses, which no doubt includes advertising. Maybe those annoying Vonage commercials will Finlay go away.

The company reported a churn rate of about 2.4 percent. If Verizon Communications Inc. (NYSE: VZ) can prevent Vonage from signing up new customers as part of its patent infringement case, the Holmdel, NJ company is doomed because it can't sign up new customers fast enough to replace the ones that quit. During the quarter, there were 332,000 gross subscriber line additions and 166,000 on a net basis. Revenue was $195 million while the market ting costs per gross subscriber line addition was $275.

Judging from my past Vonage posts, I know the company has plenty of loyal customers. I believe in VoiP too. That's why I signed up for Comcast Corp.'s (NASDAQ: CMCSA) service. That technology is here to stay even if Vonage may not be.