NEW YORK Veoh Networks, the Web video venture backed by former Disney CEO Michael Eisner, has replaced its CEO as part of a 25-person reduction in staff.
The San Diego-based company has dumped former Yahoo ad executive Steve Mitgang after less than two years as CEO, replacing him with Veoh founder Dmitry Shapiro. Roughly 45 staffers remain at the four-year-old company, which has received funding at various junctures from Spark Capital, Time Warner Investments and Eisner’s Tornante Co.
Along with the layoffs, Veoh also announced that it would focus its efforts on its five-week-old Video Compass product, a Web browser plug-in designed to make clips persistently available during a Web user’s browsing experience. For example, the company claims the product can enhance search by automatically pushing video content from sites like YouTube, MSN and others to a user’s desktop to complement text search results.
However, that announcement has fueled speculation that the company’s video aggregation site Veoh.com was flailing and thus being deemphasized. Not so, according to Shapiro. “Veoh.com is our core business,” he said, adding that the site had recently landed sponsorships from Sony and Frito-Lay (Cheetos). “We’ve monetized it for over a year and every single quarter is a record quarter. By no means are we moving away from it. We are augmenting it.”
Yet to some, Compass might sound like Veoh is moving backwards, since in the past the company touted related products such as VeohTV, which promised to be a Web video DVR, as well as peer-to-peer services that never quite went mainstream. “This is different than those businesses,” Shapiro said. “We’re not going back.”
In fact, Shapiro claimed that Compass is gaining 25,000 new users each day. “We always believed it would be big. Every day we come in and say, holy crap!”
So why the layoffs then? “We are all watching the economy. We are just tightening our belts. A lot of our core technology is already built. We want to make sure we continue to innovate, so we are streamlining the team,” he said.