This morning, KIT digital (KITD) officially announced they have acquired NYC based The FeedRoom in an all stock deal valued at around $9.8M. While that's only about 1.5x The FeedRoom's $6M in revenue, the deal will probably end up being closer to 2x revenue since The FeedRoom agreed to the deal some time ago, back when KIT's share price was somewhere around $7.

Mark Portu, CEO of the FeedRoom left the company on Friday and will be consulting to KIT digital during the transition period. Daniel Webster, SVP of Business Development and a ten year veteran of The FeedRoom also left on Friday. As expected, there have been a few other personnel changes at The FeedRoom since last week and I expect we'll see some more as the company gets folded into KIT. The FeedRoom's SF office is going to be closed down and KIT is currently evaluating what their long term plans are for their office space in NYC.

For The FeedRoom, being acquired was really their only option. They raised $12M two years ago and while they still had some cash in the bank, Mark would of had to have raised another round before too long if the company really wanted to grow their revenue. On paper, the services of KIT and FeedRoom fit nicely together and considering that KIT paid FeedRoom investors with all stock, it was an easy deal.

While the deal makes sense on paper since it gives KIT a U.S. presence, enterprise and government customers, and all of The FeedRoom's technology, the success or failure of this acquisition will all come down to the integration of the two companies. KIT has a challenge ahead of them since they are doing multiple acquistions and integrations and can't yet know how much of The FeedRoom's revenue will remain come next year.

As with any integration, the real test comes 6-8 months later when you find out if customers are still happy and keeping their business at the new company. If KIT can keep the vast majority of The FeedRoom's $6M in revenue twelve months from now and integrate The FeedRoom's platform with their own, the deal could be positive. But if the integration does not go quickly and smoothly, some of the revenue KIT gains from the acquisition will surely be lost and that will have a negative impact on their bottom line.

Another concern is that KIT loses focus since they have made so many acquisitions as of late and are now entering completely new vertical markets and appear to be trying to be everything, to everyone, across every device. It's possible they can pull it off, but all of that remains to be seen. I believe that KIT now has all the pieces they need to be successful, from a product perspective, but how they price, package, market, sell and deliver those services is going to decide their success or failure. I think we'll know either way when we look at their business in another 9-12 months.

It's been a busy morning with a bunch of news on the wire from many different companies. Here's a quick run down and I'll have more detailed posts on Adobe, Limelight and KIT digital's announcements later in the week.

• Adobe Announces HTTP Delivery, Flash Player 10.1, Bit Encryption and More

• Limelight Networks Introduces XD, the Company’s Next-Generation Global Network Platform

• Limelight Networks Introduces LimelightDELIVER XD and LimelightCONTROL XD

• KIT digital Acquires Nunet and The FeedRoom

• VBrick Unveils VEMS, The VBrick Enterprise Media System

• AEG Acquires Webcasting Company Incited Media To Form AEG Digital Media

• Kaltura Delivers Video to Educational Institutions & Students

• Scripps Networks and 5min Form Strategic Content and Advertising Partnership

Last week I reported that KIT Digital had acquired The FeedRoom, in a deal that will be announced today. But in addition to The FeedRoom, KIT Digital also acquired Germany based Nunet which will also be announced this morning. I'll post more on my thoughts about both of the acquisitions later in the week.

Update: The press release from KIT Digital is now on the wire.

I'm still looking for moderators for two sessions at the Streaming Media West show in November. The sessions are "Successful Content Syndication and Aggregation Strategies" and "Monetizing Long-Form Video".

I'm interested in moderators who can be neutral on the topic and aren't from vendor companies, unless the person you are suggesting has a blog and is already writing a lot about either of these subjects. I have to close out the program for good next week, so please send me an e-mail ASAP if you're interested or if you think you know of someone who would be a fit. I'll give a free conference pass to anyone who helps me place either moderator.

I thought I was all done covering the Akamai HD webcast earlier in the week, but Tim Siglin, one of the writers over at StreamingMedia.com made a really good point about the webcast that I totally missed. During the webcast, Akamai said they can now deliver HD video to the iPhone, but as Tim points out, the iPhone isn't capable of getting HD content.

From Tim's Blog:

[I have nothing against Akamai in particular, but unfortunately some of the claims made can't be substantiated. One in particular struck me as key to the whole press conference. Leighton claimed that, "Today there's [sic] 50 million homes that have connected gaming consoles – or other devices – that are capable of displaying HD video, of getting it and displaying it into the home. Also, there's [sic] 45 million iPhones out there today capable of displaying HD video."

Let's take a look at the facts:

a). No one else has ever claimed that the 1st gen iPhone or even the iPhone 3G is capable of of HD playback, which is the only way to get to the 45 million iPhone number.

b) Even the claims that the iPhone 3GS is capable of displaying HD content are conjecture, as Apple does not allow HD playback on the iPhone 3GS (even 480p content can't be played back).

c) While everyone is doing "higher definition" for live streams to desktop Flash and Silverlight players, many are doing HTTP streams, and a few are doing true HD (480, 720, 1080i/p) to these same players, there are a limited number of companies doing true HD live streams via HTTP, which is where Akamai wants to tell its story. None are doing it to the iPhone, however.

The reason I say it is key to the whole press conference is this: if all Akamai is claiming is "higher definition" as its term for HD, there's no story here, since others are doing it. If they're claiming HD for the iPhone, there's a story here but not one they can support.]

Tim's absolutely right. The screen res on the iPhone, even the new one, is only 480 x 320 at 163 pixels per inch, that is not HD. How can Akamai claim it is? Tim made multiple requests to Akamai for more details and was provided with a copy of a document called "Akamai HD for iPhone Encoding Best Practices" that as Tim says, "states, on page 5, the best practice is to encode at a maximum size of 400 x 224 and a maximum bit rate of 864 kbps. Which one of these settings qualifies as HD content? You're right if you answered none of them as content encoded at this rate / size would be considered unacceptable on the desktop, and further undermines Akamai's claim of its HD network providing content owners with the ability to encode once and play out to multiple platforms/players."

So what does Akamai consider to be HD video to the iPhone? In multiple back and forth emails with them last night, (see all of them on Tim's blog) Akamai said, "we believe the following requirements should met for HD specific to mobile:

– HD source content
– Over industry accepted video standards
– Adaptive bitrate streaming technology
– At bitrates over 700Kbps
– At an appropriately high resolution for the device rendering the video

Akamai's definition of what HD is to mobile makes no sense. You can
have the best "source" you want, but that does not mean the output will
be good. As Tim says, "If I take Akamai's argument about their
definition of HD (which runs counter to Paul Sagan's opening comments
in the webcast) and ignore the arbitrary bitrate limit Akamai has set,
I can generate a 200kbps stream from the 1080p HD content I film at my
children's soccer game, and then call it HD".

If "industry accepted video standards" is one of Akamai's requirements, then what would Akamai classify as non-industry accepted video standards? Does Akamai mean over industry accepted video "protocols"? There is no "standard" in the online video industry, so no idea what that word from Akamai is defining? Standard what? There is no standard video codec, bitrate, aspect ratio, platform, player, etc….

I'm sure others have have a similar take on this, so the comments section is open and you should read Tim's blog post for more details on this whole subject.

Last Friday, a federal judge invalidated ten claims relating to Acacia Media Technologies family of patents on audio and video transmission and streaming media. The case dates all the way back to 2002 when Acacia filed suit against Echostar, DirectTV, Time Warner Cable and CSC Holdings, Inc.

For me, this patent fight with Acacia was personal when in 2004, the company came into the streaming media industry and started threatening universities, vendors, and content owners with legal action if they didn't pay up. Acacia put a target on our industry and threatened to try and derail our growth when they claimed to own patents that covered just about every form of online digital audio and video transmission. We took up the fight soon after and dedicated a whole section to it on our website to try and get the word out on what Acacia was doing. While it's taken five years, it's great to finally see these broad patents shot down in court.

While a few hundred companies did pay Acacia to license the patents before this ruling, I'm guessing they now wish they hadn't. But I know that for some small companies, they simply could not afford to fight it in court and it was cheaper for them to simply get a license. It's good to know that Acacia won't be able to force companies to do that any more, at least as it pertains to their online video patents.

Telecom Italia Sparkle, which operates networks in three major regional systems in Europe, the Mediterranean and Latin America will soon announce (Updated 10/1: Press Release of announcement) that they plan to enter the CDN business through a partnership with CDNetworks. TI Sparkle will resell all of CDNetworks suite of services I expect we'll hear more about this today or tomorrow.

Last week, John Milburn, President of CDNetworks International, gave me an update CDNetworks business and their plans to take the company public private. You can read that interview here.

In addition to TI Sparkle, you'll see another major carrier make an entry into the CDN market with an announcement early next week. For all list of the carriers and telcos that have entered the CDN market, check out www.cdnlist.com