The Vonage (NYSE: VG) saga continues. Douglas McIntyre reported recently of a "sucker rally" in Vonage stock as Vonage tried to fight off a patent lawsuit brought against the company by Verizon (NYSE: VZ). Friday brought with it a refusal of an appeal made by Vonage and slapped the voice-over-IP telephony firm with a $120 million lawsuit.

Legal costs have hurt Vonage and may increase its risk of bankruptcy. The company said that it may not have enough money to pay $253.5 million in debt due as early as December 2008.

The firm had a first-move advantage and created an innovative service. Unfortunately, the legal issues and commoditization of voice-over-IP technology has severely hampered the prospects for the young company. I would expect the company and its customer-base would not be a standalone business a year or two from now.

Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no positions in the stocks mentioned above.

The questions are beginning to swirl about Skype's future as a property of eBay Inc. (NASDAQ: EBAY) I for one think it's high time for Meg Whitman and crew to put that lumbering ox on the butcher's block. The latest in a long painful series of failures and foibles for the once overpriced Skype VOIP system is eBay's recent scolding of some of it's members for placing Jajah telephony buttons within their item listings to effectively allow the member to member communications which Skype was at one time slated to accomplish.
A report by Stuart Corner of itWire states that, "According to Jajah, eBay has informed some of its users that placing Jajah Buttons on offers within the eBay marketplace is not allowed." Apparently Jajah buttons violate a long standing eBay policy against links to live chat systems. Free communication among eBay members is discouraged. Jajah co-founder Daniel Mattes, said: "We will work on behalf of our users to ask eBay to reconsider." I'm afraid to say that if eBay frowns upon Google shirts at their eBay live event, they'll probably continue to stand in the way of Jajah buttons in their item listings also.

A recent Bloggingstocks post by Beth Gaston Moon points towards a brighter future for Skype based on the words of Meg Whitman. I suppose anything is possible but this blogger thinks that if eBay doesn't unload Skype and do it quickly, they will be stuck with the world's largest pink elephant ever. For now at least, someone with some communications savvy could take hold of Skype and still mold it into something with some mentionable growth potential. As eBay clings willfully to Skype, technology threatens to overtake Skype dead in it's tracks in the hands of a management team which is in need of circumspect evaluation. Some people might want you to think that Skype's revenue increase of 96% year over year is something to crow about but if you recall, for the last two years previous, Skype did about nothing for eBay's bottom line and a 96% increase of nothing isn't much.

Australian-based Mig33, instant messaging and mobile VoIP provider, has snached up a cool $10 million in venture capital, reports Red Herring. Mig33 is centered around the mobile communications business and competes against such names as Talkster, Sooner, VoxLib, Nimbuzz, AIM/Google Talk (NASDAQ: GOOG), Yahoo! Voice (NASDAQ: YHOO), and eBay's (NASDAQ: EBAY) Skype. Mig33 claims it can save mobile phone users significant money with its international calling card services. I fail to see what services that Mig33 offers to consumers beyond the tried and true standard fare also offered by its competitors, but given the fact that it already has a reported 4 million users, it is obviously doing something right.

What strikes me as being very different about Mig33 is the ability it gives to its subscribers for earning discounts, and even generating profit, by acting as brokers for Mig33 calling services. Mig33 refers to its customers as "affiliates" and will allow these customers to act as secondary marketers of prepaid calling credits. Affiliates are even allowed to buy calling credits in bulk and then may create and market their own prepaid mig33 calling cards. To some people this may look like a pyramid type arrangement on its face, but it's nothing like that. The reality is that no one is required to act as a sales agent simply by virtue of being a subscriber. Secondary sales are completely voluntary and are a benefit of Mig33 services provided as an adjunct to its standard services.

More and more we shall see the "give something back" proposition becoming a facet of successful business models. As companies such as Mig33 offer revenue-generating options to its customers, we shall see those companies reap the rewards. It is this type of revenue-enhanced customer service, similar to Google Adwords and MetaCafe, which are now setting the new trends. Now, is it possible that Google (NASDAQ: GOOG) is considering a working agreement with Mig33 as the next phase of its own VoIP program?

Ummm ... could be!

AT&T Inc. (NYSE:T), the once-monopolist of the telecom arena that seems to have reformed, today showed strong profit and revenue growth thanks to its purchase last year of BellSouth. Keeping the growth going, though, will be difficult.

AT&T's fortunes has been rising fast with the BellSouth merger now completed (after some serious anti-competitive regulatory scares at the start of this year). It reported quarterly profit of $2.8 billion on revenue of $28.97 billion.

The company is taking a more aggressive stance on the "integrated telecom" approach that gives customers a "one-stop shop" to buy virtually all telecommunications services. Unfortunately, the company's competitors are doing the same thing.

Time Warner Cable Inc. (NYSE: TWC), Comcast Corp. (NASDAQ: CMCSA) and Sprint Nextel Corp. (NYSE: S) offer everything from TV to wireless Internet to home telephone service. All these players want to offer everything to the customer and gorge on that big, fat integrated bill.

AT&T's acquisition of the old Cingular Wireless business with the BellSouth merger makes the company the largest wireless carrier in the U.S., where much of AT&T's profit growth is now coming from. On that note, heated competition from Verizon Wireless has not gone away.

Investors will closely watch AT&T's prowess this year in increasing margins from non-wireless businesses.