Engadget writes that Vonage (VG) may be teaming up with Earthlink (ELNK) to offer a WiFi-enabled phone that can allow VoIP calls but can switch to a cellular signal if the WiFi signal is not available.
Although the product may be the offering of two weak companies, there may well be a market for inexpensive handset service, and, the program might help get the two companies out of the mud. Earthink’s stock traded at close to $12 a year ago. Now, it is just above $7. Its transition from being an ISP to a company that builds out WiFi has been a tough one. Cities have been slow to approve widely distributed WiFi.
Vonage’s problems have been worse. The stock has dropped from $17.25 to $5.48. Despite growing revenue and smaller losses, Wall St. is concerned that the company cannot compete with cable companies that bundle VoIP service with broadband and TV.
Neither company has a good way out, but offering a joint product may be a beginning.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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