Eyespot Shuts Down (Did Someone Press Fast-Forward on the Video-Editing Startups?)

Eyespot, a San Diego-based online video startup, has shut down operations and is trying to sell its assets. News of the dissolution comes via a Twitter from Eyespot co-founder David Dudas picked up by TechCrunch.

Eyespot had initially offered web-based video editing tools before changing strategy earlier this year to be yet another white-label video vendor. Its white-label customers had at one time included Demand Media’s eHow and ExpertVillage. The company raised $3.7 million in October 2006.

The web video editing tool market has seen a lot of carnage and also payouts along the way. It’s never been all that clear to me exactly why some companies lost and some won. For some reason the little sliver of a sector played out in fast-forward compared other online video startups, many of whom continue to trudge along.

Here’s a quick recap (imagine it being played to a video montage, if you like): Yahoo acquired Jumpcut but seems to have let it die on the vine. Cuts was sold at a loss. Flektor got bought by MySpace but doesn’t seem to have been integrated all that well. Hulu acquired Mojiti but just for its engineering team, not its product.

Most recently, Google acquired Omnisio for YouTube. When asked for comment earlier this week, YouTube wouldn’t say when Omnisio will be incorporated into the site.

YouTube has been without a video-editing tool for months, after taking down the YouTube Remixer powered by Adobe (which it had only launched last June, to negative reviews). So few people used the tool, its disappearance was barely noticed (we didn’t report on it being taken down, and only asked YouTube PR about it after seeing a mention that it was no longer accessible on Loic Le Meur’s blog).

So at least Eyespot is being a bit original by shutting down on its own! We’ll keep you updated on any news about whether its assets sell. Meanwhile, we can watch the rest of the online video sectors go through their lifecycles in slo-mo, by comparison.

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