A SWOT analysis -- a look at strengths, weaknesses, opportunities, and threats -- is a good way to evaluate a company's business operations.

Vonage Holdings (NYSE: VG) was an early provider of Internet-based telephone services, and the company launched one of the worst initial public offerings of 2006 (or was it one of the best?). The legal storms blowing around Vonage have settled down lately, so it's time to take a fresh look at the company under the harsh spotlight of the SWOT process.

Strengths

  • The company is hip both to current trends and to the unique opportunities presented by network-based calling plans. Exhibit A: A suite of Vonage applications for smartphones gives you VoIPerrific international rates while bypassing the expensive international plans of AT&T (NYSE: T), Verizon (NYSE: VZ), and Sprint Nextel (NYSE: S) entirely.
  • Vonage is moving closer to breakeven and now reports steady operating income. That's what deep cost-cutting can do for you.
  • The share price more than doubled in a matter of days when Vonage introduced a new calling plan with an international focus last summer. Could this happen again?

Weaknesses

  • In spite of an improving bottom line, Vonage's subscriber count and revenue have stalled out. The company is withering on the vine until it can figure out how to start growing again.
  • Improved marketing would surely cure much of what ails Vonage today, but the company can ill afford to do it. Vonage spent $228 million on advertising and marketing efforts in 2009 but lost 175,000 subscribers while driving up the gross customer acquisition cost by 10%. Ouch.

Opportunities

  • Since launching the Vonage World plan, the future for Vonage looks increasingly international.
  • World plans bring in high-quality customers, the lines offer fatter margins, and the retention rates are high. The sooner Vonage accepts that this is the future and starts to market itself accordingly, the faster you'll see black ink on the bottom line.

Threats

  • Once unique, Vonage is now one of a gazillion VoIP operators. Verizon runs voice over Internet protocol lines for its FiOS customers, Comcast (Nasdaq: CMCSA) does it through its cable modems, and then you have Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), YMAX (inventor of magicJack), and others offering radically different voice communications services.
  • Some of Vonage's rivals are much bigger and stronger, and others give away their services for free. Competition is tough here.
  • And that doesn't even account for wireless substitution, wherein many people are packing away their home phones altogether and just going wireless.

Vonage has come a long way from the embattled start-up being sued by every major telecom, but the growth engines have stalled and need to be restarted.

Did this SWOT analysis skip over some detail of monumental importance? Fill in the blanks by way of the comments box below.