Brian Fuller's blog on the media, marketing and content creation

Out of Joost

Posted on | July 1, 2009 | 1 Comment

Joost, the online video-sharing service founded by Skype founders Nik Zennstrom and Janus Friis, pulled the plug on its original business model. The company, according to The Wall Street Journal, said it would reinvent itself as a whitebox technology provider for companies wanting to publish Internet video under their own brands (Hmm…. no first-mover advantage there.)

Here’s the nut quote from Mike Volpi, who is relinquishing his gig as CEO as part of a Joost shakeup:

“In these tough economic times, it’s been increasingly challenging to operate as an independent, ad-supported online video platform.”

One by one, ad-supported Web sites are gasping and collapsing by the roadside. Why? It’s become a commodity business. When advertising is everywhere–print, video, online, phone, mailbox, roadside, gas station, sky, public restrooms, napkin holders in taco joints (yes I saw that this weekend)–it becomes a penny-ante business. And it’s worse online because content is growing and limitless, so the real estate’s cheaper by the day.

When I think of Internet publishing and advertising lately, I can’t get the DRAM (dynamic random access memory) business out of my head. It’s another commodity business. The world can’t function without DRAM in electronics systems, but the sector makes no money. It’s highly volatile. Great years following dreadful years. But some observers have insisted that if you add it all up from the sector’s beginnings, it’s not profitable, despite some great boom years.

This may not be an apples-to-apples comparison, but my point is there are some economic scenaria in which rationality doesn’t exist. Could this be the case online?

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Comments

One Response to “Out of Joost”

  1. Sean Raman
    July 1st, 2009 @ 8:13 pm

    Brian:

    Interesting blog but one – in my opinion – applies mostly to consumer products. If you are selling a product that the entire, if not most, populace needs then certainly your comments are accurate. However, I would not apply the same logic to technology products. As they say in the events business, a lead is not a lead. Not all content are the same and neither are the demographics and frame of mind of readers.

    Sean Raman

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