YouTube wannabe Veoh is closing up shop after ripping through nearly $70 million since its 2005 founding and coming up short in its latest attempt to raise more cash. The company laid off its remaining workforce yesterday and the Wall Street Journal is reporting the company is likely to file for Chapter 7 bankruptcy protection soon. Dmitry Shapiro, Veoh's founder and CEO, told the Journal that last minute efforts to sell the company or to find more financing came up empty.
The online video aggregator, which reportedly counted 25 million users, said in its media kit that it served up more than 350 million views a month to users who spent more than 26.5 minutes on the site and watched more than 100 minutes of video each month.
The company also counted a pretty heady list of investors, including Goldman Sachs, Spark Capital, Shelter Capital Partners, Michael Eisner's Tornante Company, Time Warner Investments, Intel Capital, Adobe Systems Incorporated and, well, you get the picture.
Veoh has been struggling for awhile, despite its reasonably strong product. Stories about Veoh trimming its workforce have turned up pretty routinely over the past couple of years, as its labored to make a dent in an online video market dominated by YouTube and recently seconded by Hulu.
In September, it won a drawn out and expensive ($6 million to $8 million in legal fees) court battle over copyright infringement with Universal Music Group. A federal court judge dismissed the suit, saying the video site's copyright protection procedures satisfied all the requirements of the "safe harbor" provision of the Digital Millennium Copyright Act and said the company had taken "active steps to limit incidents of infringement."
At the time, Veoh said that the resolution would allow it to focus its energy on its business and it predicted that it would reach profitability in the next two quarters. Apparently, the damage done was too severe to allow it to recover.
- see this Wall Street Journal story
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