Internet telephone provider Vonage Holdings Inc. (NYSE: VG) released quarterly results on Thursday that were better than what most analysts had expected. The company, though, still faces a tough legal fight with Verizon Communications Inc. (NYSE: VZ) that threatens the viability of the Internet phone provider.

It would help if the company had ever made money, but it hasn't. This sounds like the satellite television and radio companies in their infancies as well. Vonage, though, may be able to get there faster. That is, if Verizon doesn't run it into the ground.

Vonage's first quarter loss was $72.3 million ($0.47 per share). Although this is less than the year-ago quarterly loss of $85.2 million, the improvement has been overshadowed by legal messes with incumbent and overpowering telecom giant Verizon.

To a point, Verizon (and all other established telecoms) are frightened by the emergence of new technology which could take customers away from them. When an Internet connection can be used for television broadcasts, radio, telephone and web usage, telecom companies who can't cash in on that start sweating. In other words, it's no surprise Verizon is going for the jugular here.

Customers clearly want Vonage's services, as the company's revenue increased 64% to $195.9 million in the first quarter, up from $119.7 million a year ago. Shares went up by about 11% as investors were pleased with such large revenue and customer gains.

Vonage CEO Jeffrey Citron stated that technical workarounds are almost in place to allow Vonage to not "infringe" on two (of the three) Verizon patents that have it in legal trouble. If Vonage can bypass the alleged legal issues it has with Verizon soon and can continue signing up customers, the company may yet make a profit and survive.

Vonage Holdings Corp. (NYSE: VG), which has been found to have infringed on three Verizon patents, warned investors that its legal woes could push the company into bankruptcy. Investors are heading for the hills, sending the stock down 7%.

Could this be a buying opportunity? Successful investors often go against the grain. With all the negative sentiment surrounding the company, whose shares have plunged 80 percent since going public last year, there just may be value here.

This stock, though, isn't for everybody. Vonage's warnings, which is part of the 10-K that the company filed with the SEC yesterday, says that intellectual property litigation, especially our ongoing patent litigation with Verizon, if determined against us, could... lead to the bankruptcy or liquidation of the company."

With a current market cap of half a billion dollars and the potential of court-imposed limitations on its ability to add new customers, Vonage is about as contrarian of an investment as it gets. And while I consider myself a contrarian, I definitely don't have the guts to touch this one.

But people make money in the stock market by buying low and selling high. For those who are game enough to buy Vonage's stock. I wish you the best of luck. You'll need it.

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.

Vonage Holdings Corp. (NYSE:VG) has lost again.

A federal judge today ordered Vonage to quit using technology from Verizon Communications Inc. (NYSE:VZ) patents that its infringed upon.

Judge Claude Hilton won't formally enter the injunction for another two weeks while he considers Vonage's request for a stay, according to the Associated Press. Vonage has said that service won't be interrupted if it loses the Verizon case.

Investors seem to think otherwise. Shares of Vonage plunged 24 percent on the news. They have dropped 56 percent so far this year.

I've said it before and I'll say it again, Vonage is heading toward oblivion.

Even without the patent dispute, Vonage was in trouble. Now, the Holmdel, New Jersey-based company is toast. It's kaput. It's roadkill.

Vonage is too small to compete against larger companies like Comcast Corp. (NASDAQ:CMCSA). About the only thing that can save Vonage is a buyout from either private equity or a larger rival, but I'm not sure that will happen iunless the Internet phone company prevails on appeal.