Updated: Veoh, the Michael Eisner-backed video site, has been struggling for some time and has now filed for bankruptcy, according to a message CEO Dmitry Shapiro put up on his blog this afternoon; MediaMemo first reported that a bankruptcy filing was coming, citing unidentified sources, earlier today. The San Diego company, which initiated a series of significant layoffs over the last two years, let go its remaining employees yesterday.
Although online video use has continued to grow robustly through the recession, the actual dollars going into the space remain small. That was one problem plaguing Veoh, which also spent much of its existence fending off copyright infringement suits from the major record labels. The video site scored a major victory last September, when a federal judge in Los Angeles threw out a suit brought by Universal Music Group. At the time, Shapiro, who founded the company in 2005, said that with the UMG suit out of the way, he hoped to get back to focusing full time on running the business.
In his blog post, Shapiro cites “the distraction of the legal battles” as well as “the challenges of the broader macro-economic climate,” as driving the need to file for bankruptcy.
In addition to Eisner’s backing, Veoh raised some $70 million in funding from Goldman Sachs, Time Warner (NYSE: TWX), Intel