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Posts Tagged ‘joost’

Joost, the failed video venture started by Skype founders Janus Friis and Niklas Zennström, was put out of its misery in November 2009 when Adconion Media Group decided to pick up the remains of the company for an undisclosed sum.

Today, the international audience and content network operator is launching a suite of online video advertising products and services, targeting agencies and brand marketers who might be interested in running in-banner and in-stream video advertising on the Joost Video Network.

Video destination site Joost.com, meanwhile, will remain up and running (gotta love that ‘beta’ tagged logo) and will be used as a portal to showcase and distribute branded entertainment content.

Here’s how Nick Higgins, director of global video at Adconion, pitches the new offering:

“Adding this product offering gives Adconion a distinguished position among ad networks, as we are the only provider with in-banner and in-stream capabilities; an exclusive relationship with a branded entertainment studio; in-house creative services; and a video portal, Joost.com, that we own, operate and sell exclusively.”

Adconion stresses that this is the first product from the combined entity formed when Adconion acquired Joost’s assets. Since then, Adconion has integrated its ad server with the Joost video player and is the exclusive video ad provider for Joost.com and the Joost video player in its embedded form. Adconion also touts its exclusive relationship with the RedLever studio for the content side of the equation. The two companies say that will work with agencies and marketers to develop fresh content, from advertisements to webisodes.

According to the press release, the Joost Video Network will serve video ads on Adconion’s network, which self-reportedly spans 2,000 premium publishers in more than 70 markets worldwide. Adconion claims it is capable of reaching more than 350 million unique users across the globe.

All in all, it seems like Adconion made a good move by throwing Joost a lifeline, though I’d love to know what they ended up paying for the assets of the massively hyped venture.

So it’s the end of 2009 and an appropiate time to take stock. We’re not going to bore you with a long analysis of the year. Suffice it to say that funding for Europen startup tech companies remains tight. And when VCs who are running out of LPs to go to, you really know it is. The VC model is still finding its feet in a market where exits are still not that clear. For many companies 2009 was a nightmare – especially the first half. But anecdotal evidence I’ve been picking up suggests that confidence in the European tech scene re-started tentatively after the summer. Hopefully, conversations that have been going on for the last few months will see the light of day in new announcements, launches and, I daresay, one or two exits in the new year.

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Niklas Zennström, half of the infamous duo that started companies like Kazaa, Skype, Joost and Rdio, took the stage at the Le Web conference this afternoon to talk innovation in Europe and the lessons he’s learned as a European entrepreneur for the last 9 years.

Zennström said he found it encouraging to find that so many European entrepreneurs and startups are busy building innovative things in Europe too, and that conferences and Le Web are a great way to bring everyone together.

He talked about his most successful venture to date, Skype, and also acknowledged that mistakes were made building other companies like Kazaa and Joost. Unsurprisingly, he regards those mistakes as valuable lessons rather than failures.

Zennström said being an entrepreneur is a lifestyle, and requires complete dedication. Real company builders should forget about spare time and hobbies, and prepare for a lot of sweat and hard work. On the other hand, he said, riding that wave can prove to be very rewarding.

The entrepreneur turned venture capitalist / entrepreneur left his job together with Janus Friis back in 2000, funnily enough on the same day NASDAQ peeked. P2P technology back then was regarded as the next big thing, like realtime at present, and something else in two years.

First lesson that he learned: to be successful in business, you have to believe. Sometimes, you’ll be the only one who believes, but you need to be strong and passionate in order to see things through.

Zennström and Friis saw Kazaa grow quickly in terms of users and installs, but they consider themselves now to have been ahead of the time. Zennström acknowledged that mistakes were made and opportunities missed, particularly in terms of working together with record companies for business development.

The vision for Skype came when the duo saw broadband getting critical mass, and that their technology would fit right in there. They knowingly went after a large industry they considered needed fixing, and figured if they could just take one percent they’d be successful, mainly because of the high margins in that industry.

Skype grew really quickly, but it was bootstrapped for a long time. In fact, Zennström said Skype had a lot of trouble getting interest from venture capitalists in Europe because of the risk involved, and mulled talking to VCs based in the United States. Ultimately, they stuck to Europe, also because it wouldn’t be a good idea for them to travel to the U.S. because of pending litigation from the Kazaa days.

Zennström said Skype was always a global company, and more European companies should be thinking that way, try to build distribution partnership across borders. They should make their own path and swim against the tide, he adds.

The Swedish entrepreneur also said there’s a misconception that Europe is bad at building very big companies, and that it’s mainly an issue in the high-tech and Internet sector. He referred to companies like Louis Vuitton and Ikea as counter-examples, and pointed out that most of these companies never took venture capital to grow.

Zennström said Europeans generally don’t have the right mindset for entrepreneurship, and that they are too risk averse. There’s also the issue of brain drain, European entrepreneurs moving to Silicon Valley, which he thinks will become less of a problem in the future. He also lamented the fact that European tend to stigmatize failure. Success, after all, is not a pre-defined formula.

Europe has other problems too, according to Zennström. Too complicated to set up companies, hire and fire people, and so on. The EU has so far been unable to adequately address that problem.

Zennström did say that he thinks the trends are changing now, and that more success will come. He praises conferences such as Le Web, the fact that entrepreneurs are starting to connect more and come more agile and less averse to changing the business strategy if necessary, and that there are more role models for aspiring entrepreneurs.

In the end of his talk, Zennström said there’s no Silicon Valley in Europe, but that he’s convinced we do not need one either.

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I wasn’t kidding around when I wrote that Rdio, the latest online music venture backed by Niklas Zennström and Janus Friis – the original founders of Kazaa, Skype and Joost – was assembling a killer team by hiring away top talent from some of the most promising startups in the digital music space while still in stealth mode.

The latest name to surface on LinkedIn is that of Wilson Miner, a designer, web developer and entrepreneur from San Francisco.

Miner was formerly interactive designer at Apple, where he worked on the first comprehensive redesign of Apple.com in more than 10 years. He went on to co-found and head design for EveryBlock, the hyperlocal news startup that was acquired by MSNBC for an undisclosed amount in August 2009, a mere two years after its inception.

Miner was also one of four people that helped create the original version of Django, an open source web application framework written in Python.

At Rdio, Miner will be working with Malthe Sigurdsson (former lead designer and creative director for Skype) on the design of the online music service, which will conceivably be available both as a desktop, web and mobile application. ReadWriteWeb recently got its hands on some screenshots, although I’m told the actual product will look distinctly different from these early design mock-ups.

I’m left wondering how much capital has already been invested in Rdio pre-launch, considering that the startup has quite some top talent from all over the world working for them (some for about a year and a half already) while its first public beta has yet to ship.

And of course I’m curious about the fate of the company: will Rdio prove to be another Skype (lots of hype, solid product, disruptive, successful and a moneymaker) or another Joost (lots of hype, full stop)?

(Photo cc Flickr / yaili)

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Yesterday, the already very public fight for Skype entered yet another round, with the publication of recent filings of a motion for preliminary injunction against former Joost CEO and Chairman Mike Volpi and Index Ventures – where the man currently works as a partner – asking that he refrain from using knowledge or confidential information he obtained while at Joost in current dealings with eBay/Skype.

There are loads of interesting nuggets in the documents, which are well worth a read if you’re as fascinated by the whole thing as we are. For instance, would you have guessed both Facebook and multiple members of the Apache Software Foundation played an interesting role in this particular part of the story?

To understand why, you need to understand what the lawsuit against Volpi, brought on by Joost and Skype’s initial founders Janus Friis and Niklas Zennström, is actually about.

According to the two European entrepreneurs / enfants terribles, Volpi (pictured) has systematically breached his fiduciary duties at Joost to become the next Chairman of Skype if it were to be effectively sold to the new investor group that has agreed to acquire the company from current owner eBay.

This group also includes Volpi’s current employer Index Ventures by the way, which is being sued by the Skype founders separately.

The allegations span three core issues: the misappropriate use of confidential information gained at Joost in an effort to entice the buy-out group to join Index Investors in a play for Skype, a misuse of the same confidential information for plans to revamp Skype’s technology in the long run, and the attempts made by Volpi to lure key Joost engineers with knowledge of JoltId’s intellectual property (GI or Global Index, the peer-to-peer protocol technology developed and owned by Friis and Zennström) to the new Skype.

The third part is where Facebook comes in, albeit indirectly.

In July 2009, then-CEO of Joost Mike Volpi according to the court documents – which includes evidence in the form of e-mail communications and more – arranged a meeting between Index Ventures’ Danny Rimer and Joost Chief Architect Justin Erenkrantz (pictured) to offer him a potential job at the new Skype.

Erenkrantz was deemed one of the online video startup’s “most valued engineers” by the company’s founders in the case.

Just for your reference, Erenkrantz is an ex-Google engineer, current President of the Apache Software Foundation and former treasurer of the association.

In addition to Erenkrantz, Volpi allegedly undertook attempts to poach Sander Striker, Director of Engineering at Joost and also a member of the ASF.

The goal of the meeting with Erenkrantz, held at an industry conference, was to have him take a look at the current endeavors within eBay to develop a technology work-around for the P2P technology intellectually owned by JoltId and get his feedback, and to assess if he would be a good new member of the Skype diligence team (pending acquisition) and the new company’s technical team after the deal was done. Soon after, an official offer to Erenkrantz was made by Volpi.

The reason why that irked Friis and Zennström tremendously, the court docs show, was because they went to great lengths to retain Erenkrantz at Joost when Facebook – after Amazon – offered the man an engineering position at the social networking company, costing Joost a lot of money. They had managed to keep him from taking a job as software developer at Google after two internships there when they first hired him, and he was clearly a very valuable asset for the company.

Straight from the docs (also embedded below):

Although Volpi’s efforts to poach both of these Joost employees were equally unlawful, his overtures to Mr. Erenkrantz were particularly threatening. As Volpi was aware, Joost had recently expended significant effort and company resources to retain him – in the face of an offer for Mr. Erenkrantz to join Facebook.

As Joost founder Janus Friis write in a June 5, 2009 e-mail to Volpi: “I spoke to Justin Erenkrantz yesterday. Given the concerns about loosing [sic] him and the signficant ripple effects it could case,” Mr. Friis sought Volpi’s approval in paying him a substantial retention bonus, increasing his salary, and offering him a position as a part-time technical consultant for Joltid. Volpi concurred in these retention efforts, and having supported Joost’s bid to keep Mr. Erenkrantz from joining Facebook, nonethless attempted to lure Mr. Erenkrantz away from Joost a month later.

For what it’s worth: Friis and Zennström, who are still eager to buy back Skype themselves, seem to have Erenkrantz on their side in this matter. This is unsurprising, because he doubles as a consultant for Joltid at the moment, but it doesn’t bode well for Volpi in this case. In a declaration, Erenkrantz unambiguously supports the Skype founders’ motion for preliminary injunction (also embedded below).

Business, egos, lawsuits and emotions. It’s like watching Dallas!

PI Brief – PUBLIC –

Declaration of Justin Erenkrantz In Support of PI –

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When a group of investors pooled their resources a few weeks ago to put a bid in to buy Skype from eBay, I thought there was a good chance that Skype’s legal woes were behind them. Apparently, I was wrong, and a new lawsuit makes it clear just how bad the situation is for Skype.

Sure, Skype doesn’t own its core P2P technology, and founders Janus Friis and Niklas Zennstrom were trying to rip that IP out of the service. But that’s all old news from months ago. Surely those new investors wouldn’t have committed to paying $1.9 billion for 65% of a company that didn’t control its IP?

At the time of the deal, people close to the transaction told me that the new investors had a much better relationship with Niklas and Janus than eBay, and the situation would soon be worked out. Our best guess was the two would be given a piece of Skype, and possibly a board seat, and the litigation would be dropped.

But that isn’t the case, it seems. This new intellectual property lawsuit against former Joost CEO Mike Volpi and venture capital firm Index Ventures really has nothing to do with Joost at all. It’s all about control and ownership of Skype, and it’s a signal that the dispute is nowhere near over.

What’s most interesting about the lawsuit is a single disclosure early in the lawsuit complaint. Not only does Skype not own the core P2P technology underlying the service, but they don’t even have access to the source code (emphasis added):

A source code version of the GI Software is licensed by Joltid to Joost, allowing Joost to be the first company to successfully deliver television and other video content in real-time over a peer-to-peer network. An executable-only object code form of the GI Software was licensed by Joltid to Skype, a well-known Internet-based company that provides users throughout the world with free or low-cost telephone services over the Internet. Skype did not obtain a license to the GI Software source code, however, and the license it did obtain was terminated based on Skype’s breaches of the license agreement.

And this bit of information singlehandedly explains possibly the entire history of Skype over the last few years. Want to know why they never opened up to developers in a meaninful way? It’s because they couldn’t. They can’t even tweak their own core source code to allow it. Skype has never disclosed this, but it must be a source of monumental frustration for them.

That frustration boiled over in an interview I did with Skype last week, where they made it very clear that they want to, and plan to, open up widely to developers. But until this litigation is cleared up, and Skype has access to the actual source code that runs its service, that isn’t going to happen.

This new litigation could tank the acquisition. Or it could change it materially. Or it could result in a big compromise where Niklas and Janus take a big role in the new Skype. But whatever happens, it has very little to do with Mike Volpi and Index Ventures. The real story here is that Skype is restrained from innovating because they don’t own their own IP. In fact, they can’t even see the core IP.

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The Skype-eBay plot thickens. Joost and Joltid, both companies owned by Skype’s founders, have filed a lawsuit against former Joost chairman and CEO, Mike Volpi. The suit also names Index Ventures, the VC firm where Volpi is a partner. We’ve embedded the legal document that appears to have been filed this morning, below.

According to a press release issued this morning:

The lawsuit alleges breach of fiduciary duty against Volpi, aiding and abetting breach of fiduciary duty against Index, interference with prospective business advantage, misappropriation of trade secrets, breach of contract against Index, breach of confidence, and civil conspiracy. The suit seeks an injunction requiring the defendants to return to the plaintiffs all documents and files containing confidential information that the lawsuit alleges was misappropriated from Joost, and enjoining the defendants from making any use of the alleged misappropriated trade secrets, among other things.

Earlier this week, Joltid, the Swedish firm owned by founders of Skype sued eBay and recent Skype buyers Silver Lake Partners and its partners in the buyout, Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board; accusing them of copyright violations. The Twist: Skype founders Janus Friis and Niklas Zennstrom also founded Joost and Volpi, Joost’s former chairman and CEO who left the imploding company to become a partner at Index Ventures, has been rumored to be a contender for Skype’s CEO position.

While Friis and Zennstrom named Volpi as a defendant in the earlier suit against eBay, it appears that the new suite against Volpi alleges leaking of trade secrets from Joost, breach of contract and “civil conspiracy.”

eBay sold Skype in a deal valuing the peer-to-peer telephony service at $2.75 billion a few weeks ago, with the new investors owning approximately 65% of Skype, with eBay continuing to own 35%. Several months ago, Skype’s founders made their intentions public by announcing they wanted to buy Skype back from eBay. Shortly after this announcement, eBay announced that Skype was to be spun off as a separate company and then IPO.

Joost –

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Google, which has dominated search advertising, is hoping to take over the display advertisement space by launching new DoubleClick Ad Exchange to create an open, real-time marketplace for large online publishers and ad networks and agencies to buy and sell display advertising space. In an announcement made on the company’s blog, Google says that display advertising, which are ad formats that include videos, images and interactive ads are becoming “vital in boosting awareness and sales” on the web.

Traditionally, publishers and advertisers using Google’s AdSense and AdWords products would have to manually plan their display ad campaigns. Now, publishers can tap into Google’s ecosystem for ads where prices are set in a real-time auction and advertisers can access a large pool of inventory within one platform.

Google says the benefits for publishers include the real-time allocation, letting them allocate ad space to the advertiser that pays the most at a given time; access to more advertisers; greater control over advertisers and ad formats, a sleeker UI, and payment system managed completely by Google.

And of course advertisers can access a platform that provides more publishers and ad space, a greater control over where a display ad appears, and access to a new API that lets advertisers and networks integrate their own functionality and systems when working with the Ad Exchange.

Google bought display ad provider DoubleClick in 2007 for $3.1 billion in cash, after apparently winning a bidding war with Microsoft. The announcement of this new marketplace is a direct move against Yahoo, which has dominated the display ad marketplace for some time.

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On the very same day that a certain search and Internet advertising giant based in Mountain View, California has made public its plans to soon bring to market an open-source operating system that it hopes will give Microsoft a run for its money when it comes to powering the netbooks of this world, a lone startup from Paris, France has raised millions in financing to do exactly the same thing. I’m talking about Jolicloud, Netvibes founder and former CEO Tariq Krim’s new company, which has just raised $4.2 million in Series A funding from Atomico Ventures and Mangrove Capital Partners.

With the investment, Jolicloud not only gains capital from two of the most widely respected venture capital firms in Europe, Krim also wins two heavyweight entrepeneurs / investors on its board of directors as well as one experienced advisor. Atomico Ventures’ Niklas Zennström (of Kazaa, Skype and Joost fame) and Gilles Samoun (current fotopedia CEO) will both take seats on the startup’s board, and Michael Jackson - partner at Mangrove Capital Partners and former COO of Skype - will take up the role of advisor.

With the news surrounding the implosion of Joost and the startup’s move towards providing white label video platforms for companies, we thought it would be a good idea to check in with one of Joost’s new competitors. As we wrote in our post about Joost’s prospects as a white label video community provider, there is already plenty of competition, including Brightcove, Magnify, and Ooyala.

Brightcove is perhaps the best-known player in the space. But another one which has been relatively successful in creating interactive video sites for brands is Magnify.net. The video hosting and sharing platform, which launched in 2007, is rapidly growing its white label service and is expected to be cash-flow positive by the end of the year, according to co-founder Steve Rosenbaum.

Magnify has recently partnered with several sites to power their video aggregation platforms, including deals with Etsy, CarsonDaly.TV, and Bicycling.com. Magnify has also created white label video channels for Zappos, New York Magazine and The Weather Channel.

Bicycling.com recently decided to shift from Magnify’s competitor Brightcove to power its platform for original content. The cycling site is launching its Magnify-powered site in conjunction with its coverage of the Tour de France, which starts July 4th. It was attracted by Magnify’s social features, such as the ability to pull UGC videos from sites like YouTube and updates from Twitter. Bicycling.com online editor David L’Heureux plans to integrate Twitter streams onto the platform from cycling all-stars like Lance Armstrong. Magnify also allows the online magazine to aggregate a mix of videos and makes it easy for the site to offer readers external videos and internal media that is created by Bicycling.com.

Additionally, Magnify is creating subject-driven channels, such as IranLive, that aggregates video content around a specific topic and also integrates live Twitter streams with the mentions of that topic. The IranLive Twitter stream has filters that remove any Tweets with derogatory or abusive language.

What does the Joost white-label service do again?

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