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Joost CEO On US & Global Plans, Cutbacks

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Mike Volpi, CEO of Joost, spent his first weekend in California in many months dealing with the blowback from a story in The Sunday Times (of UK) that has the company scaling back its global ambitions in favor of a US-only focus. We talked earlier this evening, and Volpi said none of those things are actually true. (PaidContent had talked to Joost spokesperson earlier today.)

“We are focusing on US, Western Europe, China and a few other Asian markets,” he told me. “Taking a more measured approach to our expansion, and keeping it in sync with markets where online advertising is mature enough.” Volpi pointed out that Joost launched in China two weeks ago, and has recently signed content partnerships in Scandinavia. When you add to the mix UK, France and a couple of other Western European countries, Volpi said it is pretty obvious that the company is not scaling back from its global ambitions.

“What we are not doing is chasing every market, because as a start-up we need to be focused,” Volpi added. Due to its heritage – it was started by Skype co-founders Niklas Zennstrom and Janus Friis – Joost had received a lot of press coverage. God knows, I wrote about them a few times. The fact that it is run by Volpi, a highly regarded former Cisco executive and funded by the likes of uber VC funds Sequoia Capital and Index Ventures, it is hardly a surprise that Joost is being closely scrutinized. The company raised about $45 million in May 2007.

Joost was supposed to be the delivery vehicle for Hollywood content in the US. Instead, Hulu, a web-based video company backed by major networks chose its thunder and market, leaving Joost scrambling to play catch up. It has Viacom and CBS as its primary US partners, and it clearly needs to sign-up more A-list type content providers. Furthermore, the BBC’s iPlayer (where the former Joost CTO currently works), Kangaroo and other players are beginning to challenge Joost on its turf in Europe as well.

That said, the company doesn’t have much room for error. It needs to quickly improve its client and platform. Joost client has been subject of much criticism. Volpi knows that. He said that Joost is going to announce a new web-based platform in a few months. (We offered them 5 ways they can get out of trouble. Anil Gupte had listed 7 reasons they could be in trouble.)

When I asked Volpi about layoffs, he said that company realigned its work force. A few people were let go recently, as I first reported for NewTeeVee. Many contractors were cut as well.

As a result Joost of today is a trimmer version of its former self, thanks to pruning by Volpi, who became Joost CEO in May 2007. Some of these details were outlined in a Portfolio article. I tried to pin down Volpi on the total number of employees the company currently has, but he would not comment.

Rafat in his report says that Joost has about 100 employees. By that yardstick and my own not-quite-confirmed-data, that’s a head count reduction of around 35 to 40. Volpi said that the company is adding more “engineering” folks in their New York office and contrary to published reports has no plans to shut down the Netherlands operation.

Photo by Joey Wan.

23 Responses to “Joost CEO On US & Global Plans, Cutbacks”

  1. stephen

    Hulu kicks ass in the US. Joost will most likely have some killer content, although not the network stuff. the good news is Hulu is helping to develop the internet TV market that Joost kicked off and that may make life easier for Joost when it comes to monetization.

  2. P Cause

    While Joost tried to dazzle us with a great GUI and P2P technology, a video site is ALL about the content. Joost tried to get the media guys to give up 50% of the revenue and Joost also wanted to cotnrol the advertising relationships with brand name advertisers. Both of these are non-starters with major media companies. The media folks know that their content has value over a long period and is where all the value really is. They learned the lesson on cable, where a channel like TVland can make money off of old TV series. Why give Joost 50%. There isn’t a lot of money out there now for the content and the content will still have value later. All the gain in the deal Joost proposed was for Joost and not much was there for the media folks.

    Maybe the International markets will be different. Maybe the Scandinavian content isn’t worth much over time. But if that is true than Joost won’t get a lot of viewing or ad dollars. China is a huge market, but the popular content there is all pirated. “Prison Break” is number one on the Internet there and is posted to pirate P2P sites, fully and idiomatically correctly translated, only a few hours after it is broadcast.

    Joost is headed for the dead pool unless one of the “bigger fools” can be convinced the business has value before it dead pools.