Brad Greenspan, co-founder of MySpace.com and founder of LiveUniverse, an online entertainment network, announced that his company has acquired ailing video-sharing site Revver.
Greenspan said in a statement that he plans to merge the offerings of Revver and LiveVideo.com, his company's social-network and video site. Revver will continue to operate under its own brand.
But the ex-MySpace executive did not pass up the opportunity to take a few swipes at his former company. Greenspan opposed the 2005 sale of MySpace to News Corp. and has badmouthed MySpace and its parent company ever since.
Half of his press release announcing the Revver purchase is dedicated to blaming MySpace for Revver's failure to attract fans.
Greenspan traces Revver's troubles to January 2007, when MySpace blocked access to Revver's video player. MySpace banned Revver because of its policy prohibiting third parties from posting ads on MySpace.
Revver embedded ads within videos and was booted. That's not how Greenspan saw it.
"MySpace had become a predator aggressively blocking and censoring any Web service it deemed competitive," LiveUniverse said in its press release.
Funny thing is, none of the former Revver employees or founders I've spoken to ever link the company's problems to MySpace. They typically talk about of the video-sharing sector.
Terms of the Revver acquisition were not disclosed, but sources familiar with the deal say Revver was sold for pennies on the dollar. Sources told CNET News.com last month that Revver was asking for between $300,000 and $500,000 in cash and the assumption of the company's $1 million debt.
News.com has since learned that Revver's debt was $2.5 million. NewTeeVee, which broke the news of Revver's acquisition, quoted sources who said that Greenspan paid just under $5 million for the troubled company.
Investors had pumped about $13 million into Los Angeles-based Revver since 2005.
Employees of video-sharing site Revver said they breathed a sigh of relief Thursday after management informed them that the company had been acquired by LiveUniverse, a little-known online entertainment network.
Representatives from both companies declined to comment, but two Revver employees and an executive at a company that had inquired about bidding on Revver said managers there had informed them the sale was done. The blog NewTeeVee was first to report the acquisition.
In a report earlier this month, CNET News.com cited sources who said the beleaguered Revver was asking for between $300,000 and $500,000 and the assumption of the company's debt, which the sources said was in the $1 million range. Draper Fisher Jurvetson and Bessemer Venture Partners were among those that invested more than $12 million into Revver.
News.com also reported that talks between LiveUniverse, owned by MySpace.com co-founder Brad Greenspan, had stalled last month over the issue of debt. A Revver employee, who asked to remain anonymous because he is not authorized to speak for the company, confirmed that Thursday.
The employee added that negotiations began to pick up again after the story about Revver's troubles appeared. That triggered, according to the employee, a flurry of inquiries from other companies. Among those who called was VideoJug, an online video destination and production company.
Doug Kamin, senior vice president of marketing at VideoJug, said Thursday that he contacted executives about the possibility of making a bid after reading about Revver's woes.
"At those prices, we thought Revver would be a good deal," Kamin said. "I'm betting lots of others thought the same thing."
On Thursday Revver called Kamin to tell him that Revver's management had decided to go with the "original bidder."
Revver's staff, which is half the size it was in 2006, was ecstatic to hear that the company was saved and that they would not be broken up or moved, according to two Revver employees. The status of the company's CEO, Kevin Wells, was unclear.
For a year, the company had weathered management shake-ups that included the departures of all three founders. Employees had witnessed some of the Web's best-known video producers, such as Ze Frank and Lonelygirl15, abandon the site. Revver's audience was dwarfed by YouTube's and other video-sharing front-runners.
More recently, rumors circulated the Web that the company was running short of cash, according to the Revver employees.
"Everyone is just really happy that this happened," the Revver employee said. "We always knew that the company had great technology and a strong following of creators. We knew we had value."
CNET News.com's Caroline McCarthy contributed to this report.
Revver, a YouTube competitor that made a name for itself by paying video producers, has fallen on hard times.
The company's staff has dwindled to less than half the size it was 18 months ago, according to former employees. Rumors flitter around the Web about whether the company is running out of money. Now comes word that Revver has been trying to sell itself at a fire-sale price for months, according to three sources close to the company.
Revver's asking price is between $300,000 and $500,000, as well as the assumption of the company's debt, which is in the $1 million range, said two sources with knowledge of the negotiations. The sum is tiny considering that the Los Angeles-based Revver raised $12.7 million in venture funding.
The blog Contentinople reported last month that LiveUniverse, a network of entertainment Web sites owned by MySpace founder Brad Greenspan, had agreed to acquire the site.
The deal never materialized. A source with knowledge of the negotiations said talks stalled when Greenspan began "trying to drive down the price" and "that Revver's debt was an issue."
In response to questions from CNET News.com, Angela Gyetvan, Revver's vice president of marketing, said: "I'm not at liberty to discuss any of this with you. I can't comment."
Mark Elfenbein, LiveUniverse's chief operating officer also declined to comment.
Revver gained some notoriety in 2006 when video-sharing became a worldwide craze. YouTube dominated the sector but Revver tried carving out a niche by catering to videographers.
The company, backed by such investors as Draper Fisher Jurvetson, Bessemer Venture Partners, and William Randolph Hearst III, offered to share advertising revenue with makers of the most popular clips. The thinking at the company was that if Revver could win over the best creators, audiences would follow.
That's not what happened. Revver has yet to draw an audience big enough to make it one of the leading video-sharing sites. What it has done well is attract a small but talented group of video producers, the sources said.
"Their (producer) community is loyal to them," said one of the sources. "Otherwise, I don't know that they are worth much."
This is not the first time that Revver has entertained potential buyers. A year ago, News.com reported that representatives from Microsoft's video-sharing site Soapbox had toured Revver's offices on Sunset Boulevard. A source said at the time that Microsoft didn't appear to be interested.
Revver, a video-sharing site trudging along in YouTube's shadow, announced Wednesday that the company paid $1 million to videographers over the past year.
Los Angeles-based Revver, among the first Web sites to share advertising revenue with video creators, paid the money to 25,000 people, the company said in a press release.
Because Revver splits ad money with creators, 50-50, Nick Gonzalez at TechCrunch figured that the company makes around $2 million to $2.5 million from advertisers.
He also suggested that the figure could be lower if Revver pays more to high-end video makers.
Video-sharing site Revver said Thursday that CEO Steven Starr has stepped down, in the company's second executive shakeup in the past six months.
One of the sector's pioneers in sharing revenue with videographers, Revver said in a statement that Kevin Wells, the company's chief operating officer takes over for Starr, who will now serve as Revver's chairman.
Revver competes in a crowded video-sharing market by billing itself as a friend to artists. But what many performers prize most is an audience. Revver's has never come close to the size of YouTube's, the sector's frontrunner.
Revver isn't alone. Nearly half of everyone who logged on at user-submitted video sites last year went to YouTube.
"I think we can all acknowledge that YouTube has won the big prize," said Thomas McInerney, shortly after he stepped down as CEO of video-sharing site Guba last December.
In the last few months, privately held Revver has seen the departure of much of its staff. Under Starr, the Los Angeles-based company also launched an effort to sign content-licensing deals with Hollywood studios but abruptly abandoned the plan after only a few months, according to former employees.
In December, Revver saw cofounders Ian Clarke and Oliver Luckett leave, as well as David Tenzer, a veteran Hollywood agent hired to help find licensing deals.
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