Online video sites fizzle

July 30, 2009: 12:18 PM ET

Alec Baldwin promotes Hulu in traditional TV spots.

Alec Baldwin promotes Hulu in traditional TV spots.

Startups Joost and Veoh try to retool while network-backed Hulu cruises.

The Web video shakeout has begun. Hulu, a venture of NBC, ABC, and Fox, is growing nicely, aided in part by a slick marketing campaign using, of all things, television ads starring Alec Baldwin. But a slew of smaller sites are starting to reformulate their strategies in the hope of surviving.

Joost, which was started by the founders of Skype Technologies, recently announced it would reinvent itself as a wholesale technology provider for media companies to publish video. The New York City–based outfit was launched amid great expectations in 2006 with $45 million in funding.

Video-sharing site Veoh may also be in trouble. High-profile backers, including ex-Disney (DIS) CEO Michael Eisner and Goldman Sachs (GS), have sunk $99 million into the New York–based site since its 2005 launch. In addition to the usual startups costs, Veoh has been hobbled by an expensive court battle with Vivendi's Universal Music Group over alleged copyright violations.

Back to main story: Google (still) loves YouTube

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About This Author
Jessi Hempel
Jessi Hempel
Senior Writer, Fortune

Jessi Hempel is a New York-based technology writer for Fortune. She has written extensively about digital media, online advertising and social networking. Before joining Fortune in July 2007, Hempel worked at BusinessWeek and most recently served as their innovation department editor. Hempel is a graduate of Brown University and received a Masters in Journalism from The University of California at Berkeley.

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