Would you change phone carriers for $1125?

That’s what Vonage spent in advertising for each new customer it signed up in the last quarter of 2007.  Vonage spent $63 million in advertising and signed up 56,000 new subscribers.  Massive lawsuits scared away many prospective customers and caused many existing customers to leave Vonage for fear of a Sunrocket type shutdown.  Last summer Sunrocket suddenly shut down without warning leaving its 200,000 subscribers without phone service.  Sunrocket was the 2nd largest independent VoIP carrier.  Vonage is the largest.  Vonage, howver, has almost 2.6 million subscribers.    Vonage managed to settle all of the pending lawsuits and has put to rest fears it would shut down, at least for the time being.  Vonage has still never had a profitably quarter.  It may have been smarter to just offer customers $1000 to switch to Vonage.  That would have saved Voange $7,000,000.