Joost, the once-hyped online video startup which was a non-starter with a desktop-only client, is now killing it, Om reports. It will go browser only, and will release a small plugin that would embed itself in the browser and allow you to grab files using the P2P technologies that was the underlying technology for its high-res video service. Even a plugin will be an inhibiting factor in the takeup of the service.

But is it too late for the company? It recently expanded into China with its monitory investor Tom. We are hearing from sources that the firm has closed its new round of funding in the last couple of months, though there has been skepticism about the firm’s future prospects. With competition intense—YouTube, Hulu, Amazon (NSDQ: AMZN), Fancast..you name it—and online ad market not being stellar, acquisition of the company on the cheap side seems to be the only viable medium to long term option…

Update: News.com got to play with the new version of Joost, and its verdict is here: “The new plug-in sits on your desktop taskbar even when you’re not viewing the site, and apparently only begins to pipe data back and forth to other users when you’re watching Joost videos…Despite the need for software, it’s impressive. Videos start playing in just a few seconds and when toggled for full-screen, the quality scales up nicely.”

• Joost Expands Into China With Minority Investor Tom
• Joost Denies: No “Major Retrenchement”, Or “Sole U.S. Focus”