Adconion Media Group announced this morning that it has acquired certain key assets from Joost, the ill-fated online video service started by the infamous Kazaa and Skype founders Niklas Zennström and Janus Friis. The terms of the transaction were not disclosed, but it’s likely a firesale that isn’t bringing any returns to Joost’s investors.
Last June, Joost announced a change in its business strategy to focus on providing white-label video platforms, and Adconion says it plans to pursue this strategy. Notably, Adconion recently announced its first long-term licensing partnership as the exclusive display and video ad-serving solution for the Goldbach Media Group in Europe.
We had earlier put Joost on death watch, not in the least when its UK offices were dissolved and there was virtually no one left to comment on that story. It’s also worth noting that this morning’s news comes a mere two weeks after it was announced that Friis and Zennström had settled its lawsuits against eBay, the investor group that was purchasing Skype from eBay, early Joost backers Index Ventures and the online video company’s former CEO Mike Volpi.
On a sidenote: Index Ventures also happens to be a major investor in Adconion, having led its $80 million Series C round raised back in February 2008.
In a statement, Adconion CEO Tyler Moebius says about the Joost purchase: “Video is a top priority for our company, and through the acquisition of the Joost assets we will be able to provide advertisers, content owners and website publishers with an end-to-end global video platform and cross-channel video and display ad-serving solution.”
Moebius added that the company would be contuining to operate Joost.com, providing clients with a destination site to showcase and distribute their branded entertainment content.
Prior to the acquisition, Adconion offered targeted distribution of content, including video and TV commercials, to audiences around the world via Adconion.TV. Through the Joost acquisition, Adconion.TV will add to its library of professionally-produced video content available for targeted pre-roll ads across 2,000 publishers. Adconion claims to reach nearly 300 million unique users on a monthly basis.
As for Joost, here’s how Michael Arrington so eloquently put it when the company said it would be refocusing its business last Summer:
Here’s what I learned from Joost’s failure – celebrity founders, celebrity CEOs and tons and tons of cash can be a recipe for disaster. Applying yesterday’s solutions to today’s problems isn’t an interesting business. And finally, knowing when to throw in the towel and just return what’s left of capital to investors is an important skill as well. That way everyone can move on and focus on real value add opportunities. There’s no room for Joost in the consumer online video space, and there’s almost certainly no room for them in white label video, either. Time to call it a learning experience and move on.
And the two Scandinavian entrepeneurs who co-founded Joost are now definitely moving on, having regained a stake and board seats in the new Skype and ready to launch a ‘new breed’ of online music service.
