netting Cuban an additional $300 million and Wagner around $170 million, and making Jaeb a multimillionaire from his approximately 10% stake in the
company. I give up trying to confirm the prices quoted here and below. I was able to confirm Jaeb had a
10% stake and Cuban invested $10,000 initially, and
some other figures ($5.7 million, $1 billion) but not all.
The news of the IPO sent shockwaves through the
nascent streaming industry, not just for the overall
$1 billion valuation and 250% increase in stock price
on opening day, but also for the fact that Jaeb and
Cuban had been successful in tying up audio broadcast rights for a large number of college and professional teams at very reasonable prices. It seems the
then-novel concept of broadcasting over the internet
hadn’t yet made its way into the front offices or the college athletic directors’ fields of view, so initial internet
broadcasting rights were sold at fractions of pennies
on the dollar versus what was expected for traditional over-the-air radio and television broadcast rights.
Things got even better for Broadcast.com after the
initial IPO. Less than a year later, an announcement
by Yahoo that it was acquiring the publicly traded
Broadcast.com for $5.7 billion in Yahoo stock meant
that Cuban’s $300 million was now worth over $1 billion,
allowing him to pursue sports team acquisitions and
other investments, including the popular Shark Tank
As for the Broadcast.com domain and name, today
it points at Yahoo.com, but fails to resolve, perhaps
due to the fact that Yahoo was itself acquired by Verizon last year. Will we see the domain revert back to
ICANN and be available for the next entrepreneur
interested in reshaping internet broadcasting? It’s
unlikely, but never say never.
3. Duck, Duck, Golden Goose
One question I’ve always had about The Duck Corporation stems from its name. Founded in 1992, the company didn’t have anything to do with ducks at all, from
what I can tell. But its later iteration, On2 Technologies, certainly became the golden goose for investors.
The Duck Corporation made video codecs, including the early TrueMotion and TrueMotion2 codecs that
were used to compress animation sequences like those
in video games that, at the time, were delivered on multiple CD-ROM discs.
The merger of Applied Capital Funding (ACF) and
The Duck Corporation in 1999 followed multiple investment rounds, including one in 1995 and one in 1997.
As part of the reverse-merger transaction with ACF,
which was already listed on the American Stock Exchange, two new names for the merged entity were
used: On2.com and On2 Technologies.
Subsequent public trading activity briefly brought
its valuation to above $1 billion, or about $40 per share.
In 2000, the company shifted focus from video content
production to video compression, and the company
started the VPx line of codecs, with VP6, VP7, and VP8
codecs being licensed to a number of media encoder
and transcoder companies. The shift was noted in an
interview between then-CEO Doug McIntyre and then-editor of StreamingMedia.com, Jose Alvear.
One feat that the VPx series achieved, unlike most
of its standards-based codec competitors, was the
ability of each subsequent VPx codec to perform better compression at a lower overall computational cost.
On average, VP7 used less computational cycles than
VP6, meaning that VP7 could be used on a lower-MHz
processor than VP6.
The new On2 Technologies held its innovative encoding technologies close to the vest, causing some in
the industry to argue that the technology was actually a derivative of other compression technologies already in use across CD-ROM, progressive download,
and streaming delivery solutions.
On a somewhat related note, On2 also held its executive decisions close to the vest, even for a publicly
traded company. In early 2006, a StreamingMedia.com
interview between Doug McIntyre and I, held onsite in
Manhattan, was deep-sixed just a few days later when
McIntyre abruptly left the company.
Under new leadership, the company released VP8
in late 2008, using a boldly worded press release titled
“On2 VP8 Surpasses H.264, VC- 1, Real Video in Qual-
ity and Performance.”
The launch was not without criticism, from both in-
dustry analysts as well as a vocal group of investors
who wanted to the world to know that On2’s technol-
ogy was not constrained by the labyrinthine licensing
surrounding H.264 and the licensing agency MPEG-LA.
VP8 never really reach the market, and was even
kept out of the hands of key reviewers. At the time,
reviewers such as Jan Ozer and I were told that a company was interested in acquiring the technology. That
company turned out to be none other than Google,
which acquired On2 in mid-2009 to form the basis of
the WebM project, which married together the benefits of the Matroska file format with the video compression of VP8.
To address the concerns around whether VPx compression technologies were derivatives of other existing codecs, Google publicly issued statements regarding indemnification. Yet the company never really
fully addressed the issue until several years later. In
a blog post from March 2013, Google announced that
MPEG-LA had licensed all essential VP8 patents for
the WebM project.
“We launched the WebM Project in May 2010 with
the goal of providing the web with a high-quality,
open, royalty-free video codec that anyone can use,”
wrote Matt Frost, senior business product manager