Freetalk Acquisition

Posts: 1424 · Posted: Wed Aug 30, 2006 2:14 pm Post subject: Freetalk Acquisition

There is one interesting thing about the Freetalk acquisition that I have yet to figure out.

Freetalk was launched by Packet8 in cooperation with DSG.

What was Packet8's deal with DSG and does this takeover signal a possible future Vonage takeover of Packet8?

You may remember that Packet 8 was threatened with delisting because of their low stock price on the 25th.

I have mentioned before that takeovers are important for Vonage because of the bulk acquisition of customers but also to provide seamless transitions for Voip customers to protect the industry's reputation.

Of course one issue with acquiring both Freetalk or Packet8 are the yearly contracts. It is possible that you will be acquiring customers who will generate no revenue for on average 6 months and may not stay with you once the contract ends.

Posts: 8 · New Forum Member Joined: May 23, 2006 Posts: 8

Here's Packet8's reply to why they lost this to Vonage, doesn't sound like Vonage needs to acquire them. (http://community.packet8.net/memforum/readmsg.php?mid=c4ca4238a0b923820dcc509a6f75849b&
tid=839ab46820b524afda05122893c2fe8e)

Notice the date of the post. The Packet8 user forum was talking about this yesterday.

Posted on: 08-30-06 05:57 PM Reply Quote Send Ban Member
The UK company running the billing, customer service, and front-end web servers on behalf of Dixons went out of business due to, I believe, the small sales volumes that Dixons was generating. Selling Voip services is much more difficult and expensive than these partners think it will be. Even sales powerhouses like Home Depot and Dixons are unable to generate significant volumes of Voip sales with their massive marketing budgets and established brands. It is a credit to what we have been able to do with the Packet8 brand with the limited capital we have had access to.

We are maintaining our U.S. centric focus and do not want to set up a U.K. billing and customer service infrastructure at this time to support the freetalk customers. Also, many of these freetalk customers are prepaid 1-year customers, and the cash paid up front is no longer available. The loss of these subscribers will have a negligible effect on 8x8's financials.

Posts: 8 · New Forum Member Joined: May 23, 2006 Posts: 8

Anyone know how many subscribers FreeTalk has and how much you think Vonage paid?

Back in Sept 2005, when FreeTalk first launched, they were targeting 500,000 by year-end.