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Online Video Site, Joost, Cuts Back

Online Video Site, Joost, Cuts Back

Launched more than two years ago as “the world’s first broadcast-quality Internet television service,” Joost today announced a significant change in its business. Company CEO Mike Volpi is stepping down from the post at the online video start up to serve as chairman of the board. He said today that the company will shift to provide “while label” services for online video.

The company’s Joost.com portal will serve primarily as a showcase of the company’s technology. “We will continue to offer ad-supported programming on Joost.com,” Volpi said in his letter, “But while we are making our white label offering ready for commercial use, we’ll have fewer resources available for content operations, including content updates and refreshes.”

A copy of the letter is provided on page two.

Matt Zelesko, currently SVP of Engineering at Joost, has been named CEO with Stacey Seltzer, currently SVP of international business development and content acquisition at Joost, now running business operations.

Danny Passman and John Schultz, who joined Joost more than a year ago from DailyMotion as global head of programming strategy and director of programming strategy, respectively, are among those leaving the company.

Reporting on the move today, All Things Digital’s Peter Kafka wrote that Joost is laying off most of its employees.

“This isn’t a shock,” Kafka wrote, “Joost’s fate has been the subject of whisper and rumors for the last year or more. The service made an initial splash in 2007 by raising $45 million from the founders of Skype and an array of high-profile investors and media companies, including Sequoia Capital and Viacom (VIA), and was initially supposed to deliver copyrighted content via a peer-to-peer distribution system and a player that users downloaded to their desktops. But YouTube, and later Hulu, conditioned users to watch video via their browsers, and Joost’s software never caught on.”

— a letter from outgoing Joost CEO Mike Volpi is available on page two —

Letter from Joost CEO Mike Volpi

Hello,

Today we have made some important changes at Joost. In these tough economic times, it’s been increasingly challenging to operate as an independent, ad-supported online video platform. In order to position ourselves well for the future, we began investigating additional lines of revenue generation for Joost.

We have decided to change our focus to start providing a white label video portal platform for media companies, cable and satellite providers, broadcasters and distributors. Since we have built a best-of-breed technology platform which many of our content partners have asked us to license, transforming our business allows us to offer our technology as a service to partners. This will open up new and exciting paths for our company and we are looking forward to this new chapter in our development.

At the same time, we will continue to operate Joost.com and its associated video applications as a showcase of our technology. We will continue to offer ad-supported programming on Joost.com, but while we are making our white label offering ready for commercial use, we’ll have fewer resources available for content operations, including content updates and refreshes.

With the new focus and direction, we will, unfortunately, say goodbye to some of our colleagues and friends – some of whom you may have worked with. This is obviously disappointing and sad – it’s never easy saying goodbye to coworkers, especially when people have poured so much of their time, talent, effort and emotion into a company. We appreciate the contribution that all of our employees have given to Joost, and are working to make sure this transition is as smooth as possible. We’ll be in touch within the next week with your new contact – but if you have any immediate questions, please feel free to email stacey.seltzer@joost.com or me directly at mike.volpi@joost.com

I also wanted to let you know that I will be stepping down as CEO of Joost, although I’ll remain actively involved as Chairman of the Board. Matt Zelesko, currently the SVP of engineering, will take over as CEO, and will be assisted in running the business by Stacey Seltzer, currently the SVP of international business development and content acquisition.

Thank you for all of your support for Joost.

Best regards,

Mike Volpi

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