In a highly anticipated Initial Public Offering (IPO) recently, Vonage Holdings Corp., the market innovator and leader in the area of Voice over Internet Protocol or VoIP, is set to made its debut on the big stage. Vonage's IPO (NYSE/VG) showed tremendous interest in the market as investors scramble to pick up pre-IPO shares at the subscription price, hoping to make a quick opening day profit. The IPO was priced at $17 a share, the middle of the estimated price range.

 At $531 million, Vonage will be one of the largest IPOs this year. The hype is there, but to tell you quite honestly, I'm not that impressed with Vonage going forward.

 The area of VoIP in which you can make phone calls over broadband Internet connections is cheaper than standard wire line phone services and this has caused the strong growth in Vonage. The company is the early entrant into providing VoIP services and currently has about 1.6 million subscribers. Attracting subscribers has been extensive and expensive, but it has worked.

 Vonage may currently be the market leader and this probably allows the stock to have premium valuation, but the field is becoming extremely competitive and price sensitive, so Vonage will clearly have its work cut out for it as we move forward. Competitors include not only phone companies, but cable companies, as well.

 eBay (NASDAQ/EBAY) offers the Skype service that allows calls to the United States and Canada free of charge. I have tried it and can tell you it works fine and best of all, it is currently free to use. As the Skype service develops, I expect the range to expand globally in order to compete with Vonage and other forms of Internet-based phone services. eBay has a huge advantage in that it has a massive subscriber base already in place.

 In my opinion, Vonage should be considered a trading stock. If you make some money, take the profits. I believe Vonage will have a difficult time as the competition mounts. The stock will probably get a market lift in the short-term, but it will be trading mainly by traders and speculators. As the stock settles, investors will then begin to question the stock's fundamentals and prospects.