In what seems like a major blow to the fortunes of the online video service Joost, its UK subsidiary has gone into liquidation while its Netherlands based parent company has filed an injunction against its former CEO Mike Volpi with a plea to restrict him from using confidential information gathered during his stint at the company.
Incidentally, ex-Joost CEO Mike Volpi was ousted from the company few months ago; he went ahead and joined Index Ventures who too have been named in the injunction motion filed in a US District Court.
The current situation at Joost is a sharp contrast to its heady days in late 2007 when it was touted as an upcoming internet success story and it was able to garner prominent investors like Sequoia Capital and CBS Corporation Viacom which have invested $40 million in all.
Some analysts believe that a major reason for the slide of fortune of the online video service was a direct result of many content providers including major broadcasters coming up with their own video on demand channels rather than collaborating with aggregators like Joost.
Joost’s UK subsidiary has become a victim of an under performing business model and it was clearly highlighted when its liquidators announced “The company had failed to sustain a significant share of the internet video industry and was unable to address this effectively through a re-positioning of its services".
Joost was created by the two guys behind Kazaa and Skype, Niklas Zennström and Janus Friis, and was supposed to revolutionise TV by using its own proprietary peer to peer technology. It has been a real roller coaster for a company that looked so promising based on the credentials of its founders.