Burst.com faces off with Microsoft
Published: 04 Sep 2003 12:40 BST
In 1997, other companies introduced the industry to the concept of video streaming as a way to avoid long download times. Although this required a little buffer on the receiving end, it was still a broadcast model, because although in theory the buffer would be depleted and refilled at the same rate, in the real world, the Internet is not a direct uncluttered connection. It took a few years for the industry to realise that real-time streaming was inherently flawed and would not produce video of the quality people are used to seeing on their televisions.
In 1999, we introduced a product called Burstware, which was an alternative to real time streaming that solved the delivery quality problems and incorporated our intellectual property. The company grew very rapidly, we got some very high profile customers, and were valued at around $200m with 110 employees.
During this period, at their invitation, we became a Microsoft partner. Our technology consisted of server and desktop products, and since Microsoft had a monopoly on the desktop, we had to work with them to make sure our player would work with Windows.
Q: So what happened to sour the relationship?
For two years we worked with Microsoft. We expected Microsoft to license our technology and incorporate it. But, during this time, we saw the market implode and many of our best customers walk away. We had to shrink the company down to 20 staff and later to five, and eventually went down to just two full time employees -- me and our vice president of operations.
Microsoft offered us a one time payment of $1m for global rights to everything we owned. We rejected that offer and went back to them with what we thought was a more honest and reasonable offer, which they discounted.
So we thought that was the end of the story. Then, at the end of 2001, Microsoft held a press conference at one of the trade shows and announced what they called the third generation video streaming technology, which appeared to be almost exactly our product -- except they were calling it Corona at the time.
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