Bubble bursts for Burst.com11/26/2000 07:00:00 PM Eastern
Another video streamer showed signs of buckling last week. Burst.com laid off 80% of its workers. Citing the downturn in marketplace conditions for the cost-cutting move, Burst.com President and CEO Doug Glen said the company had raised new equity financing from SBC Communications.
In a prepared statement, he also reported that Burst.com had reduced its projected "burn" rate to $500,000 per month, from $1.5 million per month.
Cutting 77 of 95 positions-mostly in marketing and sales-was Burst's remedy for a high burn rate. "Our prudent action will impact the ability of Burst to author and fully develop on its own the future generations of its current suites of products," Glen said, adding that he is confident the company will still be able to work with SBC and other "large strategic partners" with which it is in ongoing talks.
Burst reported a $4.7 million loss for its third quarter on revenues of nearly $95,000, compared with a loss of $4.9 million for the same period a year ago, when it had no revenues to report. It lost $14.7 million on revenues of $450,000 for the first nine months of the year. As of Sept. 30, it had about $3.2 million in cash on hand.
The company game plan remains the same: Deploy its patented Burstware software on its own network to enable efficient delivery of "TV-quality" video and audio on the Web. To date, Burst has been a host for video streams from rock star Neil Young and a few small, independent content providers.