• Reuters, Monday, July 30, 2007 10:46 AM

Web video startup Hotswap.com is stamping its claim to legitimacy, attracting investment from a pair of media industry billionaire-legends: Apple co-founder Steve Wozniak and Clear Channel co-founder Red McCombs. No, Hotswap is not an online video sharing service; rather, its goal is to improve your online video viewing experience.

Hotswap uses a compression technology to transform those fuzzy YouTube videos into HD-quality. Hotswap is currently applying for a patent.

Interestingly, the company's focus in the short-term is on e-commerce--despite the fact that it could be used for any Web video genre. This is partly because McCombs' AutoNation chain of auto dealerships is one of the first companies to strike a deal with Hotswap, which will create high-def images of its cars.

"With their compression technology, they are able to drastically shorten the upload time-frame, which is critical," says one AutoNation exec. says Luke Thomas, the company's chairman, believes the auto industry will be a steppingstone to more e-commerce deals. "You will see e-commerce take off with the advent of high-quality video," he says.

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