Back in March 2006, Faultline ran a headline that said that P2P video delivery business Kontiki fell to Verisign for a ‘paltry’ $62 million. This week it changed hands for $1 million, plus just under 4 million shares in the VC firm that bought it.
The clash of cultures is likely to have led to the virtual collapse of revenue at Kontiki which probably is responsible for this ‘giveaway’ price. We know that the Kontiki team had engineered a deal to bundle the P2P video downloader and player into the Adobe Flash product, which would have made it the most installed P2P program in the world overnight.
Verisign management are understood to have blocked the deal, despite issuing a release last January about the collaboration. Adobe is perhaps please that it didn’t go ahead with this. The BBC iPlayer, which IS based on Kontiki, remained plagued with problems right up to the point where it launched in November last year, and there are still some reports about lack of satisfaction with upstream bandwidth usage, DRM, the fact that it only worked on Windows XP and not even all copies of that, so much so that the BBC is expected to phase the technology out.
The assets within Verisign’s Broadband Content Services business unit will be re-launched as Kontiki, once again, with the funding coming from $150 million fund, MK Capital.
Kontiki talks about itself these days as peer-assisted content delivery and it will be interesting to see if it can hold its own in a field that has become rapidly congested, at a time when it probably has too little spent on further development. MK Capital has not said how much money it will put into the venture on top of the $1 million that it has had to lay out to acquire the assets.
Eric Armstrong will be the President of Kontiki and Todd Johnson, formerly CEO of Kontiki, will now be Chairman of the Board.
“Throughout our time as part of VeriSign, we remained dedicated to the development and support of Kontiki’s award-winning peer-assisted delivery technology,” said Eric Armstrong, President of Kontiki. “The Kontiki technology is eight years proven in the marketplace and we are proud to claim some of the most prominent enterprises and consumer media companies in the world as our long-standing customers.”
VeriSign pulled in its horns to focus on core Internet infrastructure businesses back in November saying it would sell off a number of acquired businesses.