Something bad has been affecting Israeli video sharing company Metacafe Ltd. of late. It is not short of cash, after raising $30 million just under a year ago, and it has a modest revenue stream, but it has nevertheless been experiencing difficulties as a number of recent events show.
Problems began a year ago with the departure of one co-founder, Arik Czerniak, who was followed several months later by another founder, Ofer Adler. The two also sold their holdings (5% each) in the company for a total of $5 million. Both Czerniak and Adler kept quiet about the reasons for their departure, but one may assume that it was because their ability to influence the company's development had been limited.
Today saw another milestone, with the news that last week the company fired seven of its 95 employees.
A spokesman for Metacafe in Israel confirmed the downsizing but insisted the move had nothing to do with financial difficulties. "2008 will be a critical year for the entire sector. To enable us to move forward, we have decided to focus on the creation of a high speed content platform and refocusing our branding as a media company. This refocusing required structural changes to enable us to reach our goals. We are continuing to hire more people," he said.
According to a poll by marketing research company Hitwise, which measures the volume of surfer traffic on video sharing sites in the US, Metacafe has a 0.98% share of surfers, compared with 73.18% for YouTube. For Metacafe, this represents a 7% fall compared with 2007.
Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2008
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