Oh no, Ojo! Video phone maker and iTV company WorldGate files for bankruptcy

WorldGate Communications (OTC: WGAT.OB) has filed for bankruptcy, bringing an end to one more failed enterprise from the early interactive television era. According to an SEC filing from March 30, WorldGate assets will now be liquidated under the Chapter 7 bankruptcy code.

Ojo video phone

Worldgate's Ojo video phone.

The story of WorldGate spans multiple decades, beginning in 1996 and following through the company's transformation from interactive television business to video phone manufacturer. When it filed for an initial public offering in 1999, WorldGate touted its interactive service as one that delivered the Internet through cable TV systems. The company said it believed this revolutionary technology would "transform advertising, electronic commerce and information delivery for the consumer mass market."

Unfortunately, WorldGate was ahead of its time, and it had difficulty gaining traction in a world that knew little beyond dial-up Internet speeds and basic analog cable TV.

After giving up on its iTV roots, WorldGate turned to another Internet application, introducing the Ojo video phone for face-to-face, web-based video calling in 2004. Founder Hal Krisbergh managed to forge an alliance with Motorola (NYSE: MMI) to market and sell the phone for more than year, but the relationship disintegrated in 2006. It turned out that not even Krisbergh's close ties with Motorola--he was previously the president of General Instruments, which Motorola acquired in 2000--could save a partnership that relied on the success of an $800 piece of equipment requiring both a monthly subscription fee and broadband service.

Once WorldGate's relationship with Motorola ended, the Ojo video phone started a years-long slide into obscurity, with WGI Investor taking over the company in 2009, and Hal Krisbergh leaving WorldGate a short time later.

Interactive television, meanwhile, has continued on its own uneven trajectory. The market suffered a major blow last month when Canoe Ventures shuttered its interactive ad business, but on the other hand there has been some iTV progress in the form of basic applications like weather widgets and caller ID on the TV, as well as in the continued interactive ad deployments put forth by individual cable operators. Video calling has also evolved, though much of that market on the consumer side has moved to mobile phones through applications like Apple's (Nasdaq: AAPL) FaceTime.

As for WorldGate, last week's bankruptcy filing seems to be the last gasp from a company that looked to deny its deteriorating condition for years. One former WorldGate employee, who declined to be named, described the company's demise this way: "It's like a death in a silent movie...long...dramatic and silly."

For more:
- see the SEC filing
- see this Philadelphia Business Journal story

Related articles:
WorldGate closes after customer dispute
Ojo video phone service returns
Canoe cuts 120 employees, shuts down interactive advertising business