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Ooyala Management Buys Company From Telstra, Price Undisclosed

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In another twist for Ooyala, Telstra announced last night that the current Ooyala management team has purchased the company and its assets for an undisclosed amount. Telsta, a telecommunications company based in Melbourne, Australia, acquired Ooyala four years ago in an attempt to expand and provide streaming TV products and services. The match was not a success, however, and in February of this year Telstra took a complete write-down for Ooyala. This divestiture shows Telstra retrenching to focus on its telco business.

But the current management teams sees a lot of value in Ooyala and growth in its business model. Telstra will remain a customer as well as a channel partner for the Asia and South Pacific region. Other marquee clients include Turner, Audi, PGA, and Sky Sports.

StreamingMedia.com spoke to Ooyala CEO Jonathan Huberman about the buyout.

"We're very excited about the opportunity that's in front of us," Huberman says. "We're very enthusiastic about this because our business is growing aggressively." The two companies will continue to support existing customers, while a newly independent Ooyala has room to aggressively develop new offerings and invest in acquisitions, he notes. He expects to announce new customer in a few weeks.

As for the February write-down, Huberman says that didn't show Ooyala was "worthless," as this site wrote at the time, but that the company wasn't succeeding in the ad tech business. He describes the write-down as an accounting strategy due to the company's large carrying value. Ooyala will sell off Pulse, its ad tech product, in the next month, he says.

That leaves Ooyala with two businesses: It's still an online video provider (OVP), which comprises the majority of its business, but Huberman notes that this is largely a replacement area since most video providers selected an OVP long ago. While that area is growing at "a reasonable rate," he's more enthusiastic about Ooyala's Flex suite and the media workflow automation area. This unites disparate office platforms, making them work together. It's showing 100 percent year-over-year growth for Ooyala, he says.

Why will Ooyala succeed as a stand-alone company when it didn't succeed with Telstra's backing? Huberman, a five-time CEO, says he sees a lot of value in the company and strong growth for Flex.

Neither company is disclosing the value of the deal. While Ooyala is now independent, Telstra still has a financial interest in it: If Ooyala pays dividends or if the company is sold, Telstra will see a return. The acquisition included all Ooyala assets, its management team, and roughly 300 employees. Ooyala is based in Dallas, Texas, with offices around the world.

"It's an exciting day for us," Huberman says. He gave heads-up calls to Ooyala's major customers prior to the news breaking, and says he heard nothing but appreciation and support. For anyone who wants to learn what a newly independent Ooyala can do for them, the company will have a booth at the NAB Show New York, which starts tomorrow.

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