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Summary:

Update, Thursday 3 p.m. PST: BitTorrent confirms layoffs, but not everything else. There are rumors that pink slips have been handed to some of the employees of San Francisco-based BitTorrent. The problems stem from their ill-fated consumer distribution effort, which competed with richer, more deep-pocketed rivals. […]


Update, Thursday 3 p.m. PST
: BitTorrent confirms layoffs, but not everything else.

There are rumors that pink slips have been handed to some of the employees of San Francisco-based BitTorrent. The problems stem from their ill-fated consumer distribution effort, which competed with richer, more deep-pocketed rivals. They were trying to hawk the division to Best Buy for about $15 million, but the deal didn’t work out.

So far it’s all hearsay, but NewTeeVee’s Liz Gannes is trying to get to the facts of the story. If true, then it would be yet another tumultuous twist in the life of this company, which at times has reminded me of a daytime soap. (Not that there’s anything wrong with daytime soaps.) And like daytime soaps, its popularity, especially with file-sharing folks, has remained consistent.

I think BitTorrent can save itself. Such popularity means it can become the infrastructure player that allows for the efficient distribution of big video files. Its BitTorrent Delivery Network Architecture can be put to good use, especially with partners. As noted in a post last year, BitTorrent has been working with a handful of set-top box makers such as Pace Micro, and is trying to embed its technologies into other devices. The funny thing is that even carriers want to work with them. All of this makes this company salvageable.

It’s all a matter of adopting a lower — almost invisible — profile, something startups find hard to do. BitTorrent is clearly dealing with bloated and untenable expectations set by megamillion-dollars in financing — roughly $29 million in two rounds — and the accompanying unrealistic valuations. It should have stayed focused on its core technology.

Open question: How would you fix BitTorrent?

Photo of BitTorrent founder Bram Cohen getting a shave at FoundRead launch event courtesy of Joey Wan via Flickr

  1. In the days of metered Internet (globally, if not already in the USA), the Bittorrent technology should not and does not need to be saved. There was a news report last month that a certain ISP was planning to charge for uploads while keeping downloads unlimited. Such developments mean that Bittorrent is no longer a profitable tool.

    The entity distributing the large media file should factor in the transmission charges into the price of the product. Keeping it simple & straightforward (my version of K.I.S.S)

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  2. Their fundamental problem is that p2p is never going to be a viable distribution mechanism to the consumer. In fact, p2p is very inefficient technically, as it relies on the smallest pipes in the internet, the upload links on the last mile, to share content. p2p is primarily an economic hack, taking advantage of the fact that the carriers have not moved to a metered bandwidth scheme where they charge users the real cost of upload bandwidth. Since most of the upload bandwidth provided is normally unused and it’s not being charged for at its real price, p2p was a natural reaction. The equally natural opposite reaction is for ISPs to meter bandwidth so people pay for the real cost of that upload link. Since Bit Torrent is p2p technology, the only way out that I see for them is to find a place in what is and will be the dominant content-distribution scheme, the CDNs. My understanding is that Akamai currently uses an internal p2p network to share data between their nodes, nodes that then send data the old-fashioned way to the consumer, perhaps Bit Torrent can be applied and optimized towards this specialized internal purpose.

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  3. This story is dated. About half the original employees already quit months ago. The company has gone through 3 or 4 VPs of engineering already. Old news.

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  4. One possible path would be to look at the world through the ISPs eyes for a change. BitTorrent (the protocol) is wonderful for consumers and horrible for ISPs. If BitTorrent (the company) figured out a way to solve the ISPs problems with BitTorrent (the protocol), then I can imagine a solid business.

    A transparent caching BT tracker at the ISP could solve some of the bandwidth issues, and provide improved service to end users, turning a huge problem into a competitive advantage. It’d be a technical challenge…but nobody is better equipped to solve it than the inventor of the protocol, if he were to put his mind to thinking like an ISP. Since the hammer has already been dropped on Comcast for their bandwidth limiting of BT traffic, there is no downside for ISPs to agreeing to make BitTorrent even faster for their customers (while reducing their own peak period bandwidth usage). They can’t break the protocol, without getting slapped around by the government, so they have to do something else with it, and nobody is offering “something else”. I don’t know why someone hasn’t done it already, frankly.

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  5. The solution is is to become a CDN and get involved with a venture like Nanodatacenters so your code is embedded in devices .

    http://newteevee.com/2008/07/25/the-data-center-in-your-living-room/

    Theres a huge race in the p2p industry to be that company and Akamai didnt buy Red Swoosh for $20 Millon for the fun of it .

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  6. Here are my thoughts:
    #1 Bittorrent needs to partner with hardware and software vendors to expand the distribution network of their client. Bundle the client with the OS, with network devices, browsers, mail CDs to people, whatever it takes.

    #2 There needs to be more content on the Bittorrent site for download, more movies, more TV shows, etc. That means more deals with studios and networks, and yes even porn studios.

    #3 Options to rent for all movies, and it should be CHEAP. Like $2-3. Some people buy movies, but a lot of people just want to watch it once and move on. DRM has come a long way, there should be a way to do this by now.

    #4. When I rent/buy a movie, it should come down to my PC VERY fast. They need to seed their own network with more dedicated servers for downloading. Use cloud computing to cut costs.

    #5 They need better marketing. I know lots of people who rent movies via Netflix or other sources, but almost nobody that uses bittorrent. Possibly its because of some of the above 1-4 problems above, but i’m guessing some of it is just lack of awareness. Bittorrent is more famous for being a client for pirated stuff, especially outside the inner tech circles. I don’t think i’ve ever seen a bittorrent advertisement.

    #6 They need to expand into other businesses like flie transfer/send, backup, etc. This is also a tough business though, lots of competitors. Perhaps they could partner with YouSendIt or some other established vendor.

    I sincerely hope ISPs don’t start metering bandwidth, i personally think the backlash will be tremendous if they start doing this.

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  7. game over. no need to save them. they should be ashamed they didnt execute and instead dreamt up valuation numbers >100mm since they were 2 employees – Cohen and that weird banker dude. just look at bit-gravity to figure out how to make a business out of something you got. besides, coming single-sided technologies for video acceleration (yes, including HD) will obsolete bit-torrent the company.

    so there.

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  8. [...] game over. no need to save them. they should be ashamed they didnt execute and instead dreamt up valuation numbers >100mm since they were 2 employees – Cohen and that weird banker dude. just look at bit-gravity to figure out how to make …Posted from By r [...]

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    Thanks for your help,
    Dschibut

    P.S.: In my country, the freedom of speech is somehow constrained, please give me a hint, if you are not sure about your recommendation.

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