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Joost bows to YouTube, gives up consumer video

It's the first bust for Niklas Zennström and Janus Friis, the duo that gave us Skype and Kazaa. Joost is dropping consumer service to focus on video platforms.

The peer-to-peer magic that helped Kazaa and Skype dazzle consumers and disrupt the music and telecom industries has failed to produce the same kind of success with Web video.

Mike Volpi has stepped down as CEO but will remain chairman. CNET TV

Joost, the third major creation by Niklas Zennström and Janus Friis, the duo that also founded Kazaa and Skype, announced Tuesday that it will dump its consumer-video service and will now focus on building "white label" video platforms for "cable and satellite providers, broadcasters and video aggregators."

The move marks the end of Joost as a YouTube and Hulu competitor and also closes the book on the attempt to resuscitate the company overseen by former Cisco executive Mike Volpi. Joost announced that Volpi has stepped aside as CEO but will remain chairman.

Joost had signaled that it might be ready to throw in the towel. In April, Sony Pictures decided to pull the studio's content off Joost. Soon after, CNET News reported the company was shopping itself to cable providers, including Time Warner Cable.

Last week came word out of London that Volpi was up for the CEO job with a British public service network.

The truth is Joost never gained enough steam to challenge YouTube and Hulu. Its early missteps included requiring users to download a software client and then, despite boasting Viacom as one of its backers, failing to sign the kind of premium content that made Hulu a force.

The company, which had been heavily hyped, largely on the reputation of its founders, eventually launched a browser-based video service. By then, however, Hulu offered lots of top TV shows and movies in high-quality video.

Joost's opportunity had passed.

Microsoft has also "scaled back" its own consumer video service, Soapbox, according to a story published earlier this month by my colleague Ina Fried.