Startup Emerges From Stealth Mode

With $18 million in funding and a management team dominated by former America Online and Netscape execs, Kontiki Inc. revealed itself publicly Monday with a promise of making it cheaper and easier for content owners to manage, deliver, and sell that content. Kontiki's software borrows from peer-to-peer technology to let companies tap existing networks as a delivery channel and significantly reduce their bandwidth expenses. Initial investors include the Barksdale Group, Benchmark Capital, and Angel Investors, and the company's roster of advisers includes Mark Andreessen, chairman of Loudcloud Inc. and co-founder of Netscape.

Tony Espinoza, Kontiki's VP of products and services and a former VP at AOL, distinguishes the company's technology from peer-to-peer applications by pointing out that it's focused on helping companies deliver their own content, not on users sharing content among themselves. Espinoza says Kontiki's software also includes features not normally associated with peer-to-peer apps, such as digital asset management and XML-based authentication to protect content. Kontiki's software taps existing networks and uses them to move content around during low-usage periods. By depending on multiple servers, Kontiki's service will be especially fault-tolerant because of its ability to alter delivery routes based on server performance and traffic, Espinoza says.

Despite the company's decision to not refer to itself as a peer-to-peer service, Webnoize analyst Lee Black says that's really what it is, albeit one focused on maximizing bandwidth availability for corporate content delivery rather than file-sharing among users. "They're right not to call it peer-to-peer," Black says. "Peer-to-peer has developed such a negative connotation." Black says that while Kontiki's technology doesn't appear to be, um, peerless, its combination of deep pockets, strong contacts, and timeliness may be enough to give it a notable market advantage. He says the investors clearly recognize the crucial role bandwidth plays in digital media delivery. "They understand that current centralized distribution methods aren't going to be efficient until bandwidth costs come down."

Kevin Harvey, a general partner with Benchmark and a member of the Kontiki board, says he was impressed with the company's well-thought-out business plan, which aims to deliver content securely and in a way that ensures content owners would get paid. "Kontiki's approach leads to the lowest-cost, easiest-to-use, and most efficient solution to the delivery problem," Harvey says.

Kontiki's software is in private beta testing and will shift into public beta mode next month. Its management team includes CEO Mike Homer, former general manager of Netscape's Netcenter; and Wade Hennessee, chief technology officer and VP of engineering and a former VP of engineering for AOL's product personalization who helped develop the My Netscape service.