Seattle-based video-distribution startup GridNetworks is being sold, according to several reports. The buyer wasn't identified. Last year, GridNetworks launched its GridCast TV service, which allows Internet surfers to watch online videos instantly on their TVs, as long as they have a PlayStation 3 or an Xbox 360 connected to it. When I talked to CEO Anthony Naughtin last fall he said that GridCast TV was a better proposition for consumers than rival services like Netflix (NSDQ: NFLX) and Vudu, which require additional set top boxes for Internet video streaming. He acknowledged that the breadth of videos currently viewable via the service was limited, but said several major content providers had shown interest in adopting it because the service gives them more control over their content.
So far, there isn't enough detail about the sale to know whether Naughtin et al are cashing out for a gain or have decided to folding themselves into the new entity because they weren't going to make it as a standalone company.
A spokesman would not comment this morning. But Businessofvideo.com, which first reported the news, says that GridNetworks' buyer is a "desktop video environment company" based in New York City. NewTeeVee reports that "from what we now know about the deal it's more of a merger that won't see a significant return" for GridNetworks' investors. GridNetworks raised $9.5 million from Comcast (NSDQ: CMCSA), Panorama Capital and Cisco (NSDQ: CSCO) in a first round of funding last year.
By Joseph Tartakoff