| Joost is Effectively Finished |
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GigaOm, Wednesday, July 1, 2009, 12:04 PM
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"Stick a fork in it; Joost is done," proclaims GigaOm's Om Malik following the news that the online video startup is shifting its focus to the (crowded) field of white-label video hosting. Malik describes this market as "littered with the carcasses of other failed video hosts." The company is also replacing CEO Mike Volpi with Matt Zelesko, the current VP of engineering, and cutting its workforce by between 70 and 90 employees. It will also shut down its offices in the Netherlands.
So, what went wrong? Malik provides a tidy laundry list. "Other startups should learn from the mistakes of Joost and avoid repeating them," he says. For starters, Joost hired too many people, too quickly, and was too geographically spread out, with offices in New York, London and the Netherlands. It also launched with too much hype, too soon, which it wasn't able to capitalize on, as it failed to focus on one single market. There were also substantial problems with the company's P2P technology, which caused many users to defect early on. In the end, Malik says management took too long to realize that the client-based strategy was losing out to browser-based video services. Perhaps Joost's biggest problem was its failure to attract big content partners. The birth of Hulu, the joint video venture from News Corp. and NBC, seemed to be the death knell. Boasting large content partners and even higher-quality video technology, Hulu was quickly able to convince other content partners, and thus, advertisers, to sign up for its platform. It now owns 10% of online video traffic.
Read the whole story at GigaOm.
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