VitalStream Inserts Eonstreams’ Technology Into Advertising Lineup

The Eonstreams board felt that Newman had accomplished the goal of repositioning the company from just another streaming company to an effective advertising engine.

"We weren’t particularly excited about streaming as a focus for the business, but we were very interested in the potential value of being able to insert targeted advertisements in an audio or video stream," says Grady Vanderhoofven, executive vice president of Southern Appalachian Management Company, which manages the VC fund that invested in Eonstreams, and former Eonstreams board member. "We placed a big emphasis on fully developing and protecting the company’s ad insertion intellectual property, and we had a strong belief in Steve Newman’s ability to sell the ad insertion capability."

For its part, VitalStream soon realized that Eonstreams technologies could provide its customers with a ready-made ad insertion tool, especially once Eonstreams began ramping up its video ad insertion sales.

"The acquisition of Eonstreams is a critical element of our growth strategy," said Waterman in the press release, "as it uniquely positions us to capture additional opportunities in the on-demand and online advertising growth sectors. This combination will allow us to successfully grow and support the vast opportunities we see in the online advertising market with comprehensive and scalable business solutions."

When asked about the fact that Eonstreams seemed to suddenly emerge with a robust ad insertion solution, Vanderhoofven noted that the company had worked quietly on the solution but had not actively pursued publicity since its core technology was so well integrated into its customers streams.

"We encouraged the company to promote itself more aggressively than it had historically," says Vanderhoofven, "since it was positioned right in the sweet spot of a potentially very lucrative market."

When VitalStream offered to acquire Eonstreams’ intellectual property, the board was weighing several other offers and also contemplating the timing of the potential acquistion. "We envisioned this scenario when we originally targeted Eonstreams as a potential investment," says Vanderhoofven, "but the exit actually occurred a little earlier that we had anticipated. I think the level of interest in Eonstreams by potential suitors is a testament to the rapid evolution of the industry, the skill of the Eonstreams technology team, and Steve Newman’s abilities in particular."

Several board members expressed pleasure with the fact that VitalStream will keep the Knoxville sales and technology office intact. Newman, under the title of Executive VP, will lead VitalStream’s ad sales efforts from the Knoxville office.