Joost, the video website that was launched in 2006 by the guys behind Skype, Niklas Zennstrom and Janus Friis, has announced that it is retreating from the consumer market and will become a white label service provider.
The company said that it will be making up to 100 of its employees redundant and its CEO, Mike Volpi, has also announced that he will be standing down. Joost will also stop competing on the consumer front where it had to face Youtube, Dailymotion and newcomer Hulu.
Soon-to-go CEO Volpi wrote on the company's blog that "Today we've decided to make some changes. In these tough economic times, it's been increasingly challenging to operate as an independent, ad-supported online video platform."
The company will be focusing on providing businesses with "white label online video platforms for media companies", after becoming one of the most promising startups with a $45 million investment and partnerships with the likes of CBS, Viacom and Warner Bros.
Volpi will be replaced by the company's Senior Vice President of Engineering Matt Zelesko and Joost will also close down its Dutch development facilities as well as restructuring its operations in London and New York
Many observers, like Om Malik and Michael Arrington, reckon that the company might have been over funded, which means that they were overtly complacent and did not take into account that users were now used to stay in the browser - and use Flash - rather than download an application like Skype or Kazaa.
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Joost biggest downfall was its complacency. It was not backed by giants like Google or Microsoft and had to fend for itself with comparatively limited resources. It made the wrong decisions - not adopting Flash as its defacto platform - and ended up with doing too little, too late.
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