Joost Says It Has No Future As Portal, Enters White-Label Market; Volpi Out As CEO
Much-hyped video portal Joost is remaking itself as a “cost-effective” white-label video provider—slashing staff, closing and shaking up its top ranks in the process, possibly as a step towards its sale as a technology company rather than an entertainment platform. Mike Volpi, rumored of late to be on the short list for a variety of top jobs, is stepping down as CEO but will remain as an active chairman. Adding to the idea that Joost could wind up acquired by a cable operator, Matt Zelesko, the SVP of engineering who joined from Comcast (NSDQ: CMCSA) in January, replaces Volpi as CEO while keeping his engineering portfolio. Stacy Seltzer, the Joost vet who has been SVP of international business development and content acquisition, will run business operations. (Comcast looked at Joost earlier but has its own technological video resources and I was told was not interested in buying this one.)
In the statement accompanying the announcement, Volpi admitted what others have been saying for more than a year, especially with the rise of Hulu as a web-based video portal: “it’s been increasingly challenging to operate as an independent, ad-supported online video platform. In order to position ourselves well for the future, we began investigating additional lines of revenue for Joost.” The solution they’ve opted for is maintaining the current Joost.com portal but focusing primarily on building a white-label option for others who want to run portals. As a result, the company is closing its Leiden development office and reducing staff in New York and London to a “core” team. No word on the number being laid off, though the company has 100-plus employees.
Rafat adds: The company was founded in early 2007 by Janus Friis and Niklas Zennstroem, the founders of Skype and Kazaa who then moved on to start their own venture fund and eventually leave Skype/Ebay to launch their controversial P2P startup Joltid.
Joost has raised upwards of $50 million in funding, though it has officially announced only its first round of $45 million; prior to that it got seed investment from the founders, and after the first round it raised some more in mid-last year as we reported here. CBS (NYSE: CBS) along with its corporate cousin Viacom (NYSE: VIA) were investors in it, but neither of them have done much to help it grow; CBS relaunched TV.com early this year as a Joost competitor, in fact, so would be interesting to see what role they play going forward. Also, becoming a white-label provider doesn’t exactly inspire confidence for the company’s future: it is a hugely competitive space, with the likes of Brightcove (which says it is profitable now), thePlatform (now part of Comcast) and plenty of other video management companies.
JOOST TO PROVIDE WHITE LABEL ONLINE VIDEO PLATFORMS
NEW YORK AND LONDON – June 30, 2009 – Joost, the online video startup, announced today that, along with Joost.com, it will focus on providing white label online video platforms for media companies, including cable and satellite providers, broadcasters and video aggregators. This technology and service offering will support content owners’ efforts to build comprehensive branded environments online.
Media companies around the world are embracing internet-based video portals as a key path to distribute their premium video, but building a world-class video portal is increasingly difficult and expensive. Joost will focus on this issue and provide the market with a cost-effective, end-to-end solution for media companies to publish video under their own brands.
As a part of this new direction, Joost will reorganize and restructure its business. A core team in New York and London will work on providing these solutions, as well as operating and supporting Joost.com and its associated video applications. Joost also will wind down operations in its Leiden development center.
Matt Zelesko, currently SVP of Engineering at Joost, will take over as CEO while continuing to lead the engineering organization. Stacey Seltzer, currently SVP of international business development and content acquisition at Joost, will run the business operations. Mike Volpi has stepped down as CEO of Joost but will remain actively involved as Chairman of the Board.
Joost plans to make its white label video platform commercially available to media companies around the world. This offering will provide a solution for companies looking to build a branded experience for their content on their own site as well as other sites and platforms in their distribution networks.
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Statement from Mike Volpi:
Today we’ve decided to make some changes at Joost. In these tough economic times, it’s been increasingly challenging to operate as an independent, ad-supported online video platform. In order to position ourselves well for the future, we began investigating additional lines of revenue for Joost.
After much analysis, we have decided to change our focus and to start providing white label online video platforms for media companies and distributors. We have built a solid technology platform that there is demand for in the marketplace, and look forward to this new chapter for our company. At the same time, we’ll continue to operate Joost.com and its associated video applications.
Unfortunately, as a part of this change, we will say goodbye to many of our colleagues and friends. This is obviously disappointing and sad – it’s never easy saying goodbye to coworkers, especially when people have poured so much of their time, talent, effort and emotion into a company. We appreciate the contribution that all of our employees have given to Joost, and wish them well in the future.
Thank you for all of your support.
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