BitTorrent—founded by Bram Cohen and Ashwin Navin in September 2004—is one of the players in the peer-to-peer content delivery industry. Headquartered in San Francisco, the company invented the BitTorrent protocol and runs a peer assisted content delivery system based on the protocol.
The company dabbles in content delivery, content aggregation and hardware certification. BitTorrent DNA is a content delivery system that allows companies to use peer-to-peer technology to send large data packages over the internet. The BitTorrent Device Certification provides services to companies to ensure that their hardware is compatible with the BitTorrent client. The company offers content aggregation at bittorrent.com.
In early 2008, BitTorrent announced its partnership with D-Link and NetGear. The two companies have integrated the BitTorrent SDK Kit into some of their NAS products, and BitTorrent certified some of their routers. The company also boasts other hardware licensing partners like Asus, Marvell Semiconductors, IAdea and technology partners like Opera Software and ntl:Telewest. Although NetGear had partnered with BitTorrent before, the deal was not really substantial. This time around, however,the partnership is supposed to help BitTorrent in realizing its plans of moving beyond P2P.
The company that has been built largely on the appeal of illicit file sharing has decided to make everything legitimate. In February 2007, the company released a web based store for the distribution of music, movies and video games. Its P2P technology makes way for faster downloading of items bought from the store when compared to the time it takes for downloading from the iTunes store. Besides, the content that it offers is cheap. With more than 50 content partners including Warner Brothers, 20th Century Fox, Egami, G4, MGM, MTV Networks and Paramount Pictures, BitTorrent is trying to fulfill Hollywood’s dream of finding a balance to the power that Apple and Steve Jobs has been wielding over them.
The company recently announced a partnership with Online Game Services Inc. (OGSi) to develop a download solution for online gaming.
Further, in May 2008, the company announced its partnership with Orb networks. The BitTorrent software client application and the Orb PC application will be bundled together to enable BitTorrent’s downloads on any screen or audio device.
The company has raised nearly $34 million so far. It raised $8.75 million in a Series A round of funding from Doll Capital Management and $25 million in Series B round of funding from Accel Partners and Doll Capital Management. The company has wasted a substantial amount of its funding for a number of years and has been rather poorly managed.
BitTorrent is easily one of the oldest players in the P2P market. So far, though, wisdom has eluded its age.
One of my observations about the players who are playing in the online video space is that the experiments are very expensive. Akimbo went out of business after burning through $56 Million. BitTorrent looks like a $34 Million experiment at this point. Other lavishly funded experiments are Joost ($45 Million) and VideoEgg ($34 Million).
Although I understand the capital intensive nature of running an internet video business, there is something about unconstrained spending that makes my head reel. Especially when the large spending takes place before figuring out a viable business model, it pretty much goes against all my instincts on good entrepreneurship.
This segment is a part in the series : Deal Radar 2008