Telstra’s tech dream dies as management buy out the Ooyala streaming platform
Video streaming platform Ooyala has been bought out by its management, ending Telstra’s venture into the tech space.
Telstra wrote off its US$313m investment in Ooyala earlier this year, four years after taking a 98% stake in the business. At the time of the write-off, Telstra’s then chief executive for technology, innovation and strategy, Steve Elop, said Telstra would continue to support the business.
Former Telstra executive Steve Elop was adamant Ooyala would remain part of the telco after writing the business down last year
Elop, who left the company during the restructure that saw CMO Joe Pollard depart, said at the time of the write-down: “We will sharpen Ooyala’s focus by exiting ad tech and focusing on the underlying video platform and continuing to serve our customers.
“Importantly we do see a future in the other core parts of the Ooyala business – video player and the workflow management system. The new Ooyala management team is making positive progress through improved booking trends, product quality and reduced customer churn. However the business has yet to achieve sufficient scale.”
Ooyala’s general manager for Asia Pacific, Steve Davis, said late last year about speculation over Ooyala’s future in the Telstra camp: “As a parent, they are a very good parent because they back us. What they decide to do with us is way beyond my pay grade.
“It doesn’t really affect us day to day,” he continued. “All I care about is how we are taking care of our customers, are we increasing our revenues as a company and how we are growing. Telstra has very little to do with that.”
At yesterday’s annual general meeting, Telstra CEO Andy Penn noted that the telco still retains an interest in the company, saying about the deal: “This was completed via a management buy out with upside sharing arrangements for Telstra if the business achieves profitable growth and is sold in the future.”
Ooyala’s existing management team has been kept in place, but a question remains over the company’s Melbourne and Sydney offices, which are currently located in Telstra buildings.
Mumbrella has contacted Telstra and Ooyala for comment.
Jonathan Huberman, CEO of Ooyala, said: “The management team is excited to take on this next chapter in Ooyala’s growth.
“In addition, leveraging our resources and in partnership with private equity investors, we are actively exploring acquisition opportunities to further accelerate Ooyala’s growth.”
