TokBox Works to Break Video Chat Out of Its Siloes, Flank Google+, Facebook

8/4/11Follow @wroush

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Microsoft’s Skype division, allowing Facebook users to make Skype video calls from within the social networking site.

It’s rarely a pleasant experience for startups when Internet giants start treading in their markets—but Small told me this week that he long expected such moves from Facebook and Google, and that the new features are actually helping to increase awareness about video chat technology, as well as consumers’ comfort level with the whole experience. “Since Hangouts and the Facebook-Skype integration launched, in that five weeks or so we he have seen literally a 200 percent increase in inquiries about OpenTok,” Small says.

And it’s far better to have Facebook or Google doing OpenTok’s advance marketing work than Chatroulette, he adds, considering that site’s reputation as a hotspot for nudity. “A year ago, lots of people were having their first experience with two-way video as a result of Chatroulette, and it didn’t necessarily give people the best experience, so it was a two-edged sword,” he says. “I think Facebook and Google are going to double down on that awareness trend, but people are going to have good experiences, so it’s a one-sided sword, which I like a lot better.”

It has taken a while for TokBox to find a path to growth. The company was founded by former Cornell students Ron Hose and Serge Faguet in 2007 with backing from Sequoia Capital, and was known early on for providing a six-way video chat feature on the social networking site Meebo. By 2008 the company had raised $14 million in Series A and B funding from Sequoia and Bain Capital, and was taking the cheeky step of sending a taco truck to Yahoo to recruit newly laid-off employees. But uptake for TokBox’s chat system was slower than expected, and in mid-2009 Small, a former executive at database company MarkLogic and one of the original developers of the QuickTime video protocol at Apple, was brought in by Sequoia as a turnaround CEO.

The original idea for turning Tokbox from a standalone product into a platform that developers could tap came from customers, Small says. “We talked to a bunch of people who were interested in integrating video chat into their websites, but they said ‘We don’t want it in this one-size-fits-all way.’ The only model at the time was the Brady Bunch model—a box with six heads in it. We started hearing that it would be interesting if we could break up that metaphor. We did some experimenting, and when we saw what happened when you stripped the chrome off and started delivering video into the middle of a Web page, we knew there was something fundamental about it.”

By September 2010, Small had decided that the company would make a full pivot, turning off its branded video chat service and shifting all its resources to the OpenTok platform, which it unveiled in November. At the same time, it raised $12 million in Series C financing, with DAG Ventures now in the lead but with Sequoia and Bain still along for the ride.

TokBox is now betting that more and more website owners will see that adding face-to-face communication can make almost any other Web-based activity more social and more engaging, whether that means playing games, shopping, watching movies, or even … Next Page »

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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