This morning, Alcatel-Lucent (ALU) announced it has acquired CDN technology provider Velocix. As I reported two months ago, Velocix had been in talks with various companies about being acquired and the deal with Alcatel-Lucent closed five days ago. Terms of the deal were not announced and while I have not spoken to anyone yet who can confirm my estimate, my guess would be the deal size was around $20-$25M. To date, Velocix, formerly known as CacheLogic, had raised over $50M spent about $25M, from at least four rounds of funding and was doing well under $10M a year in sales.

For Alcatel-Lucent, this acquisition was purely a technology one to get their hands on Velocix's Metro product line and they didn't acquire the company for their revenue. Velocix's Metro product will not be bundled into Alcatel-Lucent's offering and will directly target service providers like Verizon, who are some of Alcatel-Lucent's largest customers.

The Velocix Metro product will fall under the IP division at Alcatel-Lucent which reports into Steve Vogelsang, VP Of Business Strategy. I had a chance to speak to Steve yesterday about the deal and he mentioned that while it's too early for the company to comment on everything they plan on doing with Velocix's technology, they do see this as natural fit for their service provider business. Steve said that, "many of our customers and service providers have been evaluating their CDN strategy and the Metro is a really well thought out product for what the service providers need." Steve said the immediate goal is to take the Velocix product offering, productize it and start offering it to their largest customers.

When asked if Alcatel-Lucent plans to continue to operate the Velocix CDN and compete in the traditional CDN business Steve said, "we're not sure exactly how we will proceed with the CDN services but our focus is going to be providing solutions to our service provider customers." I don't see Alcatel-Lucent competing in the traditional CDN business with the likes of Akamai and Limelight since that's not what Velocix is truly setup to do and isn't a fit for who Alcatel-Lucent's customers are. That said, no current Velocix customers will be impacted and all of the licensing deals Velocix has in place with customers like Verizon simply stay as they are.

I also asked Steve how important Velocix's P2P functionality was to Alcatel-Luncent when they were evaluating the technology. Steve said that the P2P function is interesting but that most of the operators they are talking to today are looking at building out a CDN infrastructure that supports standard protocols and not P2P. He did say that when it comes to P2P, the operators are intrigued, but
are still wondering how to control, manage and exploit P2P traffic.

I'll post an update to my guess on the deal size if I get more concrete details.

Related Posts:

– Content Delivery Provider Velocix Close To Being Acquired, Telco Most Likely

– Velocix Launches New CDN Offering For ISPs With Support From Adobe and Microsoft

– Velocix Acquires Live P2P Technology From Rawflow, Announces Deal With Kontiki

– Q&A With John Dillon, CMO of Hybrid CDN Velocix

It's been two and a half years now since I started this blog and in that time, amazingly the blog has done over 2M page views. Traffic to the blog continues to climb and is on track to do 1.5M page views this year alone. None of this would have been possible without the continued support of many other bloggers and sponsors for whom I need to thank.

A lot of my traffic comes from other writers and websites who nicely link to many of my posts. Many thanks to Steve at Last100.com, Rich at DataCenterKnowledge.com, Rob at TelecomRamblings.com, Rafat and his team at PaidContent.org, the entire crew at NewTeeVee.com and GigaOM.com, Andy at Beet.tv, Dan at Silicon Alley Insider, the team at Engadget.com, Larry at OnlineVideoPublishing.com, Pete at FierceOnlineVideo.com, Ben at OnlineVideoWatch.com, Mark at ReelSEO.com, Dave at ZatzNotFunny.com and many of the other sites, including vendor blogs, who continue to link to my content.

I also need to thank all those sites that syndicate my content including SeekingAlpha.com, Yahoo! Finance, WashingtonPost.com, NewYorkTimes.com and BusinessInsider.com

In addition to those who have linked to the blog, many of the vendors in the industry have also supported the blog by coming on board as sponsors. My thanks to the sponsors I've had over the past two years including: Adobe, Akamai, EdgeCast, Ignite Technologies, Internap, Kontiki, Level 3, Limelight Networks, Microsoft, NaviSite, NetStairs, Ortiva Wireless, PEER 1, Skytide, Tremor Media and my newest sponsors coming on board, ChinaCache, The FeedRoom and Sorenson Media.

Also, while the TypePad platform is not perfect, I have to thank them as well for providing a blogging platform that has allowed me to host and run this site for only $99 a year.

I've had a lot of fun over the past two years, have written 804 posts and received 2,987 comments. Thanks to everyone who has contributed to the conversations taking place on the blog and I look forward to continuing to hopefully write about topics that are of interest to the industry and community.

As the online video platform space continues to heat up, various vendors are still expanding and looking to fill open positions. Brightcove has 30 open positions across all departments of their company, VMIX has 4 open positions for business development managers and Ooyala has 6 open positions in engineering, sales and marketing.

If your online video related company has any job openings, let me know. In most cases I will highlight them here on the blog – free of charge.

Starting August 11th, Microsoft will roll out a dashboard upgrade for the Xbox 360 with a bunch of new options for Netflix streaming, including adding movies to your queue without a PC. I got a chance to get hands-on with the upgrade tonight and Netflix customers are going to love what's in store for them.

The most significant upgrade made to the Netflix app for Xbox LIVE members is that users can now add movies to their Netflix queue without having to use a computer. You can now browse through 100 movies per genre based on the types of shows you've previously watched and when you find one you want, you simply add it to your queue. Browsing is simple and fast and being able to make Netflix movie selections directly via the Xbox is much appreciated. The one function that's still missing though is the ability to be able to actually search for a movie based on the title. Absent of that search function, you can only browse through the top 100 movie selections from each genre that are automatically presented to you.

In addition to the new browsing feature, Netflix videos now have better adaptive bitrate technology, which enables a smoother viewing experience when your Internet bandwidth fluctuates. Microsoft says this allows for better estimates of the user’s Internet connection and is now more accurate. If the Xbox detects that a users network condition has degraded, the Xbox can seamlessly switch to a lower stream while continuing to play out the existing buffered content. For anyone who has a broadband connection that tends to degrade in
quality, this enhanced technology should help, although I didn't see a difference myself probably due to the fact that I'm on a 50Mbps FiOS connection.

While it's unclear if any of the Netflix videos are encoded at higher bitrates than before, Microsoft says the video experience will also be a better one due to the fact that the upgraded Netflix app supports improved encoding profiles that allow them to deliver higher encoded bitrate content using less network capacity.

Along with these improvements, Microsoft is also releasing a new movie parties feature for Xbox LIVE Gold members that enables them to watch a movie with up to seven of their Xbox friends. It's a pretty neat function where all the avatars sit together in a virtual theater to watch the movie and can interact with each other.

While some might be hoping to see Facebook, Twitter, Last.fm and Zune video and 1080p Instant On features in this release, Microsoft says those won't be coming out until later in the year. Considering that Netflix streaming to the Xbox 360 only launched just over six months ago, it great to see Microsoft and Netflix already updating their app and making the experience even better.

Related Posts:

– 1080p Streaming On Xbox 360 Will Require 8-10Mbps Connection For Full Quality

– Detailing Netflix's Streaming Costs: Average Movie Costs Five Cents To Deliver

– Netflix Streams 1.5 Billion Minutes Worth Of Videos To The Xbox 360

– Review, Hands-On With Netflix Movies On The Xbox 360, HD Included

You gotta love it when a company like Amazon users the power of video to get their message out. Amazon’s CEO Jeff Bezos has an eight minute video uploaded to YouTube to explain the company’s acquisition of Zappos. Now that’s how video should be used.

As good as the content of the video is, the quality is terrible for me. Wish Amazon had used a service other than YouTube.

Back in May, Sorenson Media, best known for their Squeeze encoding software and the Spark video codec, launched a new video platform called Sorenson 360. After being hands on with the offering for the past three months, I've come to the conclusion that it's one of the most well thought out platforms on the market for small and medium sized customers.

While the company markets their new service as a "Video Delivery Network", the new SaaS based offering is really a video platform that has been built specifically for those who may not need all the bells and whistles of more complex platforms like Brightcove or Ooyala. Sorenson's new 360 system was designed for the needs of small and medium sized businesses and bundles in transcoding, storage, management, player design, delivery and analytics all in one easy to use system, all hosted by Sorenson.

While I've personally used a lot of video platforms myself, many of them are designed for content owners who have a lot of complex needs or are trying to monetize their content. As a result, many platforms have all sorts of functionality for ad insertion and monezitation which makes the platforms quite difficult to learn and use. While there's nothing wrong with these systems and are valuable for content owners who need that functionality, there's also another large segment of the market who simply needs to get their content online quickly and easily without all the bells and whistles. That said, I found the Sorenson 360 platform to be not only easy to use, but also rich in functionality. Added 7/24: Thanks to the commenter below for pointing out that I didn't mention if the platform supports streaming based delivery. Currently, all videos are delivered via HTTP and not via streaming based protocols.

Encoding of content for the platform can be done two ways. For content owners needing maximum control and highest video quality, it's best for them to uploaded videos using the latest version of Sorenson Squeeze 5. This seamless functionality built into the new version made encoding and uploading videos from my desktop a snap, but for me, it was even easier to upload videos via my web browser. For content owners who don't have encoding software on their computer, being able to drag and drop a file into the browser and have the Sorenson 360 system transcode it is much easier. I uploaded a bunch of clips a few minutes in length and the system transcoded them very quickly.

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While many, including me, have been asking for some time now when YouTube will show a profit and what their long-term business plan is, today, YouTube went on the offensive on their Biz Blog to "debunk the top five myths about YouTube". While one might think that Google is going to finally provide us with real data points on YouTube's business, the post doesn't provide enough details to truly debunk anything.

This is the first time I can remember that YouTube has gone on their blog to address topics being discussed about them in the industry and comes at an interesting time. In the past few weeks, we've seen more Google executives telling people in the media they are tired of analysts trying to figure out their costs and one has to wonder if this is the start of Google trying to fight back.

While the YouTube blog post ends by saying "These myths are officially busted", they didn't officially bust anything, at least not in my eyes. Without facts and numbers as compared to the rest of their business, the few data points they gave out don't provide enough details to debunk anything.

• Myth 1: YouTube is limited to short-form user-generated content. Google says, "We have thousands of premium content partners, from Sony to Disney to Universal Music, and fans can find hundreds of full-length feature films and thousands of full-length TV episodes on YouTube."

We know Google has premium content partners, but first define what a "premium" partner is? How do we know you really have "thousands of them"? And while Google does point us to their movies page, of the 12 videos clips highlighted for me on the home page, seven of them are trailers and not full-length feature films. What percentage of full-length feature films and TV shows make up the total number of videos on YouTube? Clearly not even 1%. Now that would be fine if these premium content partners are making up the vast majority of your revenue, but Google gives us no indication of that.

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