For anyone looking for a good Sunday afternoon read, Vonage's S-1 fits the bill. It offers some intriguing insight into the company's plan to raise as much as $646-million through an IPO. The positive news is Vonage now has more than 1.5 million customers who generate average revenue of $27.65 a month. The bad news is Vonage is still spending like crazy to attract new business. In the first-quarter, the company spent $88.3-million on marketing, which explains all those banner ads and television commercials. This led to a net loss of $72.5-million on sales of $118.8 million. For anyone who believes Vonage will suddenly turn off its marketing machine to reduce the red ink think again. In the S-1, Vonage said "in order to grow our revenue and customer base, we have chosen to increase our marketing expenditures significantly. We are pursuing growth, rather than profitability, in the near term to capitalize on the current expansion of the broadband and VoIP markets and enhance the future value of our company". Translation: A huge chunk of the IPO proceeds will be spent on marketing campaigns. \The S-1 also includes a lengthy list of risks, including the fact "attracting customers away from their existing providers will be more difficult as the early adopter market becomes saturated and mainstream customers make up more of our target market." Translation: There's lot of competition with more marketing muscle than Vonage. After Vonage completes IPO, co-founder Jeff Citron's 33% stake will be worth about $850-million, while Vonage's venture capital investors (Bain Capital, Meritech, New Enterprise and 3i) will see their $400-million investment suddenly be worth $1.12-billion. Bottom line: the IPO is a slam dunk for existing investors but far from compelling for new shareholders.

Sometimes you wonder if Nortel can't win for trying. The company finally manages to convince itself its 2005 financial results are ready for public consumption (a positive development), then it goes and releases them late in the day on Friday after everyone's headed home for the weekend. (a negative development). From an optics perspective, it gives the impression that Nortel is trying to hide something because the only reason to issue a major press release late in the day on a Friday is if you want to avoid attention from investors and the media. Of course, Nortel will likely claim it received SEC clearance and/or that its paper work was completed Friday afternoon so it had no choice but to follow disclosure rules and release the financial results. Maybe this is true but this isn't the first time Nortel has utilized the Friday afternoon "trick" to release financial news. If Nortel - and CEO Mike Zafirovski - are at all interested in regaining the confidence of investors and analysts, they need to try to appear as if they are being as straightforward and transparent as possible. Issuing a press release to disclose financial results that should have come out a few months ago is not the way to do it.

Earlier this week at the Sympatico/MSN Digital Ad summit, I talked with Chris Dobson, who heads up MSN's international sales and marketing efforts. Maybe the most interesting part of the conversation was Dobson's willingness to frankly discuss Microsoft's strategic approach to the advertising market and the key trends within the online marketing world. This was a far cry from the typical read-off-the script "interviews" where senior executives talk but they don't say anything. It was refreshing to get perspective and context rather than a canned sales pitch. I figured Dobson had something to say when the first thing he said was "Microsoft has woken up to the fact online will not be a subscription world but an ad world". This led to a discussion about how Windows Live will be a hybrid between ad-supported and fee-based content/services, and the balancing act facing companies with portals (AOL, Yahoo, Microsoft) at a time when user-generated content is becoming more popular. It was also interesting to hear Dobson's belief many ad agencies are still dealing with the Web in isolation rather than putting together coordinated campaigns with print, radio and television. Clearly, Microsoft is serious about the online ad market and trying to appear as advertiser-friendly as possible. At the very least, it was encouraging to run into a Microsoft executive willing to talk about what's happening as opposed to pontificating about the Microsoft Way.

Click here for this week's podcast. (the updated and user-friendly version!)

NOTE: The sound quality of this podcast is terrible so we're going to re-do it on Monday. My apologies. If you're still interested in today's podcast, listen at your peril..:)

Another week, another podcast This week, Kevin and I talk about the Vonage IPO (what gives with that?!), the departure of Sun's Scott McNealy, the future of newspapers and the Canadian wireless sector.

So Vonage thinks it's worth $2.6-billion? I wonder what kind of numbers their investment bankers crunched to come up with this pie-in-the-sky number? Vonage is a money-losing business that needs to spend heavily on marketing so it can continue to attract and retain consumers at a time when the cablecos and carriers are start to get more serious about the VoIP market. It strikes me as a desperate attempt by Vonage's investors, who have ponied up more than $400 million in venture capital, to get a decent return on their investment. Now, the $64,000 question is whether this deal will get done. Of course, it will because many institutional investors have no choice but to take a piece of this dodgy deal or risk getting cut out of the more attractive IPOs. I mean, if Corel Corp. - which "competes" against Microsoft in the office productivity market - was able to get its IPO out the door earlier this week, Vonage can do it too. If I was an investor, however, I wouldn't touch the Vonage IPO with a 10 foot pole. Caveat emptor!
Update: IP Democracy has a chart looking at Vonage's top line financials for the past 3+ years. For my post looking at Vonage's S-1 filing, click here.

It seemed like a busy week and there was a bunch of stuff I want to highlight:
- Skype now has more than 100 million registered users  - nearly double since eBay blew its brains out to acquire Skype for US$4.1-billion. It's nice to see the Skype PR machine is alive and well.
- Not sure about the secret sauce behind Memeorandum but the mesh conference spent  seven hours in the top spot yesterday. Hey, looks mesh is getting some more love today.
- a new Canadian-made vertical search engine called Eluta, which helps people find job announcements, will be officially launched next week. Nice, clean look - very Web 2.0-ish.
- Wired reports that researchers at the Carleton University in Ottawa are looking at the idea of a biometric security device that "users a person's thoughts to authenticate her or his identity". No more passcards? Cool.
- With podcasting apparently becoming the New Radio, Frank Barnako suggests that podcasters such as Podtrac, Kiptronic and Rocketboom aren't seeing a lot of love from sponsors. According to Forrester, the mass audience will be there in four years; maybe advertising will follow along cautiously. Business 2.0 has a story that declares video blogs are booming and advertiers are starting to take not.
- My Nortel blog - All Nortel, All the Time - had record traffic yesterday. It could have been a post on Mike Zafirovski and/or a column in the National Post on whether Nortel should merge with Siemens' communications group.
- It's encouraging to see Toronto is awash in Web conferences these days. Aside from mesh, there was iSummit last month and the MSN/Sympatico Digital Ad event yesterday. Meanwhile, Kate Trgovac (a.ka. My Name is Kate)  is busy working on a plan to bring BlogHer to Canada. I should also mention the thriving TorCamp/BarCamp activities.

I work for a newspaper but sometimes wonder if it’s going the way of the telegram. This sense of impending doom was exacerbated today by Jeff Cole, who has been heading at team at the University of Southern California’s Annenberg School for Communications, that has collected data about Internet usage for the past six years. Cole, who was speaking at a MSN/Sympatico digital advertising conference in Toronto today, said teenagers aren’t reading newspapers and likely never will. At the same time, newspaper publishers are still struggling with ways to generate revenue from offering content online because there are too many free ways to get the news. With fewer readers and less-than-encouraging online prospects, Cole believes many newspapers will disappear over the next 30 to 40 years (Yikes!). One of the only bright spots, he said, are Sunday newspapers such as the New York Times that could become more popular by morphing themselves into weekly magazines. It’s a provocative viewpoint because newspapers have been around for such a long time and are still an integral part of many peoples’ daily lives. But you can’t help but think that Cole is right and/or newspapers need to change their stripes to survive. If you look around newsrooms across North America, hundreds of reporters are being cut loose as publishers scramble for ways to deal with lower advertising (which is being taken away by online rivals such as Craigslist, eBay, Match.com, Yahoo, Google, etc.). As a journalist, I don’t think newspapers will disappear but I'm biased. That said, they will need to aggressively build out their online operations (blogs, podcasts, video blogs, Web sites, RSS, etc.) as extensions of their off-line businesses – even if the business models are far from clear yet. At the same time, they need to recognize their brands and content are valuable and can be leveraged with some creativity.

Earlier this week, Canada lost a true hero when urban activist/writer Jane Jacobs died at the age of 89. Since she moved to Canada in 1969, Jacobs had been a major force in shaping Toronto's development - providing city hall with a vision of what the city could be. Perhaps the highlight was her active role in killing the Spadina Expressway, which would have run a highway right through the downtown core. (Jacobs also led the charge to kill the Lower Manhattan Expressway).
   In addition to her landmark book The Death and Life of Great American Cities, Jacobs was a prolific writer and constant presence on the local politican scene. It would have been fascinating if Jacobs had embraced the blogosphere. With an insatiable hunger for new ideas, news and lively discussion, Jacobs could have used a blog to deliver her views on a variety of topics to an audience with a growing interest in how large urban centres are developing and evolving.
   At the mesh conference, our politics/society stream is going to explore how blogs are playing a growing role in getting new ideas and fresh thinking into the mainstream. With Michael Geist kicking things off with a keynote and panelists that include Andrew Coyne, Paul Wells, Captain's Quarters, David Pollard and Tom Williams, it should be a highly engaging and informative day. For more thoughts about this stream from the mesh gang, check out Mathew Ingram, Stuart MacDonald and Rob Hyndman. You can register for mesh here.

With the launch of the IE7 beta, there has been some fascinating discussion about Microsoft's track record in the Web browser market. John Dvorak, who's no stranger to controversial, against-the-grain ideas, describes IE as "The Greatest Microsoft Blunder" - suggesting it has taken the company's focus away from more important strategic priorities such as getting a new version of Windows - Vista - out the door. So, what if Microsoft never got into the browser market? What would have happened if Bill Gates had not decided to turn the Titanic onto the super-highway or, at least, decided to focus on other online opportunities other than the browser? I suspect Netscape would probably be around and thriving, and the Navigator browser would be industry standard. Maybe it would have been better for the Web's evolution because Microsoft wouldn't have had such a key role in how people accessed online services and content. You have to remember that until IE7 came along, the core of IE was still based on technology licensed from Spyglass Inc., which Microsoft jumped on after failing to secure a licensing deal with Netscape. While Microsoft continued to reply on Spyglass,  rest of the browser market continued to move ahead with Opera, Firefox, et al pushing the envelope. Meanwhile, Netscape got sucked up by AOL, which proceeded to emasculate what had been one of the Web's most exciting companies. If Microsoft had not launched IE and/or not proceeded to attack Netscape, maybe the browser market would be a different place today. Maybe Marc Andreessen would still be working there and Netscape wold have evolved into the flagship Web 2.0 company. Then again, Netscape's demise has allowed Firefox to successfully emerge so perhaps that's the silver lining.
For some other thoughts on IE7, check out Nicholas Carr, Inside Microsoft, Nick Bradbury and Makeyougohmmm.

If any CEOs out there are looking to make a fashion statement, perhaps they should seek some advice from Ted Rogers, who was stylin' in a bold, blue suit at Rogers Communications' AGM yesterday. It was quite striking compared with the standard blue/black suit, white shirt "uniform" dutifully worn these days by most CEOs. For all the fashionistas, the photograph (left) doesn't do the suit justice but Mr. Rogers' tailor (one assumes this kind of suit doesn't come off the rack, right?) should be very proud.