Streamticker 2006: The Deals That Reshaped the Online Video Space
"We feel the integration of Macromedia’s Flash interactivity—a strong part of our ongoing strategy—into Captivate 2.0 provides a solid platform for branching beyond the standard screen capture feature that Captivate 1.0 provided," says Silke Fleischer, product manager for the Captivate line. "Scenario-based training modules that contain Flash 8 video files continue to add benefit to the new product."
On the other end of the spectrum, Adobe acquired Serious Magic. This small company had captured the interest of consumers who needed to create professional quality presentations but didn’t have the funds to pay for a professional camera crew, teleprompter, and studio setting. In recent months, Serious Magic had also created products that allowed for a mixture of audio, PowerPoint slides, and video. At NAB in April 2006, the company showed off a technology preview of a totally virtual set and (in typical Serious Magic fashion) indicated it would set a new record low price for virtual sets. All these products provide an opportunity for Adobe to move into live content creation, now that On2 has announced a live SDK for the VP6 codec on which Flash Video 8 is based.
VitalStream Acquires Eonstreams; Internap Acquires VitalStream
Sometimes it takes money to make money, and sometimes it takes an offline marketer to drive online marketing to its full potential. Such was the case with Eonstreams, a startup in Knoxville, Tennessee that brought onboard a new CEO in 2002 and subsequently shifted focus from a traditional streaming media delivery network to one that would attract national attention when it was acquired in 2006 by VitalStream.
The CEO that took Eonstream in its new direction, Steve Newman, came from a background in traditional and net-based media sales. Newman’s media career started as head of sales for HGTV and The Food Network, now a part of Scripps-Howard. "At that time, very few new media companies were focused on long-term strategies," says Newman. "I wanted to take my skillset—media marketing—and find a way to apply those skills against a new media tool."
The company pioneered ad insertion technologies that allowed radio stations across the country to sell localized ads to listeners from other parts of the country. In essence, someone in Boise listening to the online version of a Dallas-based radio station could hear advertisements for Boise companies; not only was the content then more pertinent to the listener, but the radio station extended its advertisement revenues in a way never before possible.
At the time of acquisition, Eonstreams had outgrown its own server farm and was entertaining offers from several service providers as it began to experiment with more bandwidth-intensive video-based advertisements. One of the potential partners, VitalStream, offered not just a delivery partnership but also the potential of an expanded, long-term relationship. VitalStream had been searching for additional tools to enhance its media delivery platform, and Eonstreams fit the bill.
"With our acquisition of Eonstreams, VitalStream is now positioned to provide turnkey advertising solutions to a wide range of customers looking to monetize their web content as the internet continues to claim an ever-increasing share of viewers," says Jack Waterman, chairman and CEO of VitalStream. "The acquisition of Eonstreams is a critical element of our growth strategy, 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."
Once the acquisition of Eonstreams was complete and the Knoxville office had begun to sell advertising under the VitalStream banner, the classic one-two M&A punch surfaced, as VitalStream announced an agreement to be acquired by Internap. The reasoning in the press release, in which Internap is said to be issuing 11.9 million shares of common stock, was telling.
"The marketplace for content delivery services is rapidly expanding as the needs for companies to integrate streaming audio and video into their web presence become even more critical and more complex," said Internap CEO James P. DeBlasio. "We will offer our combined customers a wider range of complementary products providing peak website performance, global scalability, and new revenue opportunities including content monetization and online advertising. Together we expect to become a formidable force in the rapidly growing streaming media and content delivery market."
The Internap-VitalStream deal should be complete by the time of publication of this article.
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