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7/26/2002
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Blue Falcon Flies High With $8.5 Million More In Funding

Blue Falcon Networks wants to help content providers contend with ever-increasing media-streaming demands without having to invest heavily in bandwidth and infrastructure, and now it's got more money to make that happen. The Los Angeles provider of peer-to-peer digital content-delivery software last week received $8.5 million in a third round of venture financing that brings total capital raised to $20 million.

Half of the funds came from Sprout Group. As part of the arrangement with Sprout, Josh Goldman, former CEO of mySimon, takes over as CEO of Blue Falcon, a post president and chief operating officer Jay Haynes had occupied.

Blue Falcon's server-and client-side software lets content providers tap consumers' PCs to avoid bandwidth drains. As multiple streams are requested, many of them piggyback onto the streams of others. The client software acts as a load-balancing system, monitoring client performance and rerouting streaming requests on the fly.

A business model focused solely on slashing content providers' streaming-related costs is "probably not a long-term strategy," says Greg Howard, analyst at research firm HTRC Group. Where Blue Falcon is likely to see the most promise down the line is in using its peer-to-peer architecture to reduce the drain on company networks as larger files, such as training videos, are made available for employees.

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