The ROO Group is scuttling its peer-to-peer digital media file sharing office in Clifton Park — six months after the online video advertising firm acquired a pioneer in the P2P field in Saratoga Springs.
The New York-based ROO on Monday announced a series of restructuring initiatives, including the closure of its Clifton Park research and development arm last week and the elimination of 10 positions there.
The restructuring initiative, which included the elimination of 43 jobs companywide, could save ROO $3.5 million in 2008.
“We are taking operational steps to improve the short-term performance of ROO Group by focusing on revenue-generating initiatives in our core business, while non-core activities are reducing our cost structure,” said ROO’s new chairman and chief executive officer, Kaleil Isaza Tuzman.
ROO in July acquired Wurld Media, which in 2005 launched the now-defunct music and video file-sharing network called Peer Impact. At its peak, Wurld held file-sharing contracts with music and movie industry giants and employed over 70 in Saratoga.
ROO had hoped to use Wurld to accelerate its development of video P2P technology, which transfers large amounts of digital information by utilizing users’ computers. In July, ROO bought Wurld for $4.3 million. ROO’s customers include the New York Post and the British newspaper The Sun.
ROO’s restructuring will distance the company from its P2P ambitions. Tuzman said ROO will outsource its P2P services instead of developing them internally. When the Wurld acquisition was announced in February, ROO’s founder said he hoped the Saratoga firm’s P2P assets would help it snag clients along the lines of News Corp.’s social networking Web site MySpace.
The shuttering of the ROO Business Solutions office in Clifton Park came a month after two Wurld executives were indicted by a Saratoga County grand jury on five felony charges, including grand larceny and falsifying business records.
The charges against Wurld CEO and Chairman Gregory Kerber and Chief Financial Officer Richard Saxon allegedly stemmed from incidents related to the transfer of assets in the ROO-Wurld deal.
The restructuring initiatives follow a leadership shake-up at ROO last week, when Tuzman succeeded company founder Robert Perry, who now serves as the vice chairman of its board of directors. Prior to that change, three members of ROO’s board of directors resigned. In December, Tuzman’s KIT Capital in Dubai, United Arab Emirates, entered a management agreement under which it could purchase 51 percent of ROO’s preferred class of shares.
In announcing the KIT deal, Perry said his company was entering “a new phase of development.” ROO’s revenues rose 66.3 percent to $10 million during the first nine months of 2007, compared with the same period of 2006. But during the same period, its net loss more than doubled to $22.1 million from $9.64 million.
KIT’s charge under the executive management agreement is to reassess ROO and position it to become a leader in Internet Protocol television services through growth and acquisitions.
“In 2008, ROO will be a leaner and focused company, committed to more disciplined business practices, aggressive sales and content acquisition,” said Tuzman.
Tuzman said he will focus on competitive yet-undeveloped markets outside North America.
ROO also announced Monday the appointment of three global operation executives — all who previously worked at JumpTV, the world’s largest Internet broadcaster of international and sports content. Tuzman stepped down as JumpTV’s president and chief operating officer to take over ROO.
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