Veoh Assets Sold to Qlipso

Los Angeles-based social video start-up Qlipso has bought the assets of San Diego-based video sharing site Veoh, according to a report from Socaltech.com. Veoh’s web site already reflects the change of ownership, stating: “Now part of qlipso, so you can share the fun!” Details of the transaction have not been revealed, and Qlipso didn’t return a request for comment.
Veoh filed for bankruptcy in February. The site competed with YouTube (s GOOG) early on and raised more than $70 million in funding, but suffered from a number of strategic missteps along the way, including the focus on a desktop player and exorbitant spending of up to $4 million per month on staff and infrastructure. A copyright infringement lawsuit brought against it by the Universal Music Group didn’t really help to turn things around, either.
Qlipso offers users the ability to combine web videos and other media assets to playlists, personalize these playlists with 3-D avatars and share them in a live web chat. The company has apparently gone through a number of iterations and was previously also know as Icontaqt, 2Peer and Playr. It is backed by Jerusalem Venture Partners and led by CEO Jon Goldman, who previously co-founded the video game developer Foundation 9 Entertainment.
Related content on GigaOm Pro: Viacom v. YouTube: All Over But the Shouting (subscription required)

Guest Column: The Online Video Landscape in 2010

Liz Gannes had an interesting post yesterday, in the wake of the Veoh bankruptcy announcement, with a great chart outlining the huge volume of funding that has flowed to video sites over the years and how that has panned out. As a document, the chart is an excellent indictment of the irrational exuberance — and folly — that attended the monies plowed into a handful of video sites.

But you’d be mistaken if you conflated this with an indictment of the health of online video more generally.
For that, a much more accurate picture was provided through recent comScore data on video viewership online. First, the comScore data shows consumption of online video doubled from December 2008 to December 2009. Second, that most viewing of online video (52 percent) takes place in the “long tail” — sites outside the top 25 video destinations.

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What Went Wrong at Veoh?

Veoh is shutting down and about to file for bankruptcy, despite raising ample funding and having solid search and recommendation technology. The site had also procured a decent audience, with more unique users than Hulu up until about a year ago, when Hulu launched an ad blitz following Super Bowl XLIII.

In a phone call with NewTeeVee, Veoh founder Dmitry Shapiro placed a lot of blame on the Universal Music Group copyright infringement suit, as well as the broader macro-economic situation. The UMG lawsuit might have limited its strategic opportunities or scared off new investors, but Veoh made a number of missteps before its final demise. Here are a few:

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Chart: The Web Video Money Pit

Online video has largely succeeded at many of its goals: It is democratizing media and encouraging a culture of sharing and participation. It’s pushing the television industry to modernize and become more interactive. It’s freeing content from time schedules and repressive windows. It’s driving cable companies to at least consider the true value of the loyalty of their subscribers.

But let’s be honest, it’s done more displacing and destabilizing than it has created wealth. And with a few possible exceptions — say, Blip.tv and Brightcove — no company but YouTube has really been able to grow a ton of value. (YouTube, Google promises, will be profitable any day now!) Continue reading on GigaOM.

Chart: The Web Video Money Pit

Online video has largely succeeded at many of its goals, but let’s be honest, it’s done more displacing and unstabilizing than it has wealth creation. On the eve of Veoh’s bankruptcy, we can look back and see a lot of VC dollars down the drain.

Veoh Gives Up On Life, Preps For Bankruptcy

After less than five years in business, Veoh has decided to shut down operations and lay off the remainder of its staff. It is also preparing to file for Chapter 7 bankruptcy protection at some point in the near future, according to MediaMemo.

The closure marks an inglorious end for one of the early web video players. The company began life as a video-sharing site that competed with YouTube, Babelgum, Joost and others as a destination where viewers could find and share online videos with friends, and Veoh raised more than $70 million from multiple blue chip investors, including Adobe (s ADBE), Goldman Sachs (s GS), Intel (s INTC), Spark Capital, Time Warner (s TWX), and Michael Eisner’s Tornante Company.

For a long time, Veoh was seen as one of the rising stars in the online video space, but it never reached the same scale as YouTube, which was bought by Google (s GOOG) in 2006, and it had a hard time differentiating itself against other video aggregators.

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What Veoh’s Court Victory Means for Online Video Sites

Veoh had a good day in court yesterday, with U.S. District Judge A. Howard Matz saying its copyright policies are in the clear with regards to a 2-year-old lawsuit brought by Universal Music Group (s VIV) against the video site.
In the two years Veoh spent fighting UMG, it saw its standing in the video portal market disintegrate, and now it focuses on an alternate product, the Veoh Compass search plug-in. Founder and CEO Dmitry Shapiro said the company spent “many millions of dollars” on legal fees, with the lawsuit impacting employee morale, preventing the raising of additional capital, and hindering the closing of strategic partnerships. (Though this was not the only lawsuit Veoh was fighting.) So — if we read the situation as Veoh taking a bullet for the rest of the video industry — what does Matz’ judgment mean for everybody else?
First of all, UMG has already said it intends to appeal immediately, so this isn’t over yet. But with Viacom-YouTube (s VIA.B) (s GOOG) litigation ongoing, and a gap in the legal precedent for the application of the DMCA “safe harbor” — which video sites use to protect themselves from users uploading infringing content, as long as they take down videos right after copyright holders alert them — what does the Veoh decision mean in practical terms? Here’s what Matz said Veoh was doing right:
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