Joost, the piñata of the online video market, has been broken up and a major piece sold to Adconion Media Group, which will retain the Joost name.
Backed with tens of millions of dollars from prestigious venture capitalists and boasting some of the most successful figures in telecom and computing, the company never got much traction. The principals in the firm, KaZaa and Skype founders Niklas Zennstrom and Janus Friis along with former Cisco executive Mike Volpi, descended into fierce infighting.
Where others saw a lackluster operation, however, Adconion sees a treasure.
"This acquisition immediately brings additional scale and content to the Adconion video pre-roll network for clients who are looking for a safe, cost-effective alternative to achieve the maximum value of online video advertising," said Tyler Moebius, CEO of Adconion, in a statement. He added that Adconion will continue operating the Joost.com web site.
In announcing that "certain assets" of Joost will be acquired, Adconion said the terms of the transaction were not disclosed. It was not immediately clear whether some pieces of the former Joost operation will remain in business.
Stating that Joost has a "strong technological platform and a compelling business model," Friis said: "Over the past few months we have been actively exploring strategic options of Joost, and have concluded that the sale of certain of its assets to Adconion is in the best interests of Joost."
In recent weeks Friis and Zennstrom won a prolonged battle to regain a substantial ownership piece of Skype. Along the way, they filed formal charges against Mike Volpi, their former partner at Joost, although the voluminous litigation among all parties including Skype majority stakeholder eBay has been resolved.
The Byzantine intrigues are also marked by the fact that venture capital firm Index Ventures has been an investor in both Joost and Adconion.