With the acquisition of PlayStream, VitalStream intends to implement self-service streaming platform for SMBs.
VitalStream Holdings Inc. announced Monday its acquisition of Seattle-based PlayStream LLC, a privately owned provider of streaming-media services for small businesses.
According to VitalStream Holdings—the parent company of VitalStream Inc., a global enterprise CDN (content delivery network) and streaming-media supplier—the deal is worth $500,000 in cash, 3.75 million shares of VitalStream Holdings common stock and 200,000 warrants to purchase common stock at $1.35 per share.
The combined company plans to implement a self-service streaming platform under the PlayStream moniker designed specifically for SMBs (small and medium-sized businesses), including those originating from a home office.
"Our goal is to leverage acquisitions to bolster our current product offering and customer base, [and] combining our technical expertise will provide customers with an affordable, automated streaming platform that makes it simple for any business to manage its digital content," said Philip Kaplan, president and chief operating officer of VitalStream.
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"The addition of the PlayStream product line fits perfectly with our strategy of investment and innovation in streaming technologies within our key target markets," Kaplan added.
For his part, Jupiter Research senior analyst Joe Wilcox seemed skeptical that pushing streaming media to a small-business audience would, for now, be lucrative.
"About one-third of small businesses under 250 employees have a basic information Web site—emphasis on basic—and almost as many have nothing at all, with the point being that, for about two-thirds of small businesses, streaming is a low priority either because they don't host the kind of Web site with that sort of content, or they don't have a Web site at all," Wilcox pointed out.
At the same time, Wilcox did note that streaming media might have greater relevance for medium-size businesses, which the combined company is targeting as well with the new service.
In any event, PlayStream founder George Grubb said he was excited about the emerging synergies and opportunities that this acquisition will offer.
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