Om Malik posted a rumor today regarding a new BitTorrent financing and possible ouster of CEO Bram Cohen. We did some independent digging and have come up with what I believe is accurate based on multiple sources and a leaked document: BitTorrent has raised a $25 million Series B round of financing from Accel Partners and previous investor Doll Capital Management, bringing the total capital raised to just under $34 million.
And CEO Bram Cohen, who created the BitTorrent protocol, is definitely on his way out. The company has retained the well known headhunting firm Heidrick & Struggles to find a replacement as soon as possible. No word on what, if any, role Cohen will have going forward.
More Upcoming BitTorrent News:
The company is yet to launch a new service to sell licensed video content on its own retail site, and has signed licensing agreements with, among others, Warner Bros. and Paramount to sell movies and TV shows at prices starting at $1 each. The company will also announce deals to put the BitTorrent software on DVRs, cable boxes, and wireless routers, enabling BitTorrent users to download legal movies or TV shows to PCs and TVs.
BitTorrent is making a real effort to stay legitimate and in favor with the RIAA and MPAA, which of course doesn’t sit well with the majority of the world’s 70 million BitTorrent users. Napster failed miserably when they tried to work with the RIAA. We’ll see how well BitTorrent does this time.
Update: In a very tense conversation with Bram Cohen and BitTorrent’s Director of Communications, Lily Lin, today, the company made it clear that Bram is with the company for the long haul. They would not comment on the CEO search.
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great post dude!! BitTorent rules!
that’s completely the wrong logo to use. it’s from a scam site that has nothing to do with bittorrent. try bittorrent.com.
I’m guessing Bram and the suits had a clash over principles.
@pat: It’s perty though.
@Pat;
Yes, i agree.
The bittorrent company can be found at http://www.bittorrent.com
You need to check the spellings of BitTorrent. Your all over the place!
Hi Michael,
please note that:
1. there is a typo in the title: bittorrent has double ‘r’
2. the logo is incorrect
Nice post, congrats.
Cheers.
Sandro
The term ‘Ouster’ is being used - one isn’t sure whether this means a firing or a mutual agreement to part ways.
It is terrible enough, to loose a high profile job,… but it’s even worse when this is happening around what is supposed to be a joyous family holiday (especially if you have kids)
$25 Million should just be enough to pay the RIAA for the rights to a couple of tracks.
People who use torrents frequently are fairly likely to download illegal videos / mp3’s etc. Giving them the choice of continuing to download the FREE illegal one’s versus paying for exactly the same content is possibly not a great business model.
BitTorrent is making a real effort to stay legitimate and in favor with the RIAA and MPAA, which of course doesn’t sit well with the majority of the world’s 70 million BitTorrent users.
The world doesn’t use bittorrent.com. It’s amazing the media - including this blog - haven’t really ingested this fact yet.
BITTORRENT.COM != the bittorrent network.
Sure, Bram invented the protocol but it’s always been open source. Not many people even use the bittorrent.com client for bittorrent downloads. Most are using utorrent, Azureus, BitComet, etc. And NO ONE uses bittorrent.com to download stuff. They use mininova, torrentspy, piratebay, or one of a zillion private trackers. Just because bittorrent.com has deals with movie studios and are filtering stuff our of their own little search engine doesn’t mean that piracy with bittorrent is going to stop or be diminished.
Bram’s not really been involved with the business decisions anyway… it’s all been ashwin navin and co. I’m guessing he’s probably pretty bored. He’s an intellectual who likes solving problems, not running a business. Nice to have as a figurehead (maybe he’ll end up as chairman or something - they’d be foolish to lose him completely if only for the name recognition) but not a manager.
Pat> thanks we fixed that
Good call.
Brad developed a groundbreaking system but the engineer is rarely the best choice for CEO - thats a completely different job!
Bram’s an awesome guy and i’m sure he has or will have something cooking very soon. Bittorrent was a huge step for filesharing, and won’t ever go away.
Bram Cohen can’t be just moved out. Its his company. If anything he just won’t be a key player no more, but even this is highly unlikely. Just as in Microsoft, where supposedly Bill Gates is no longer in charge of. Or Mayor Bloomberg of NYC and his Bloomberg corporation, common Michael. There are alot of legalities around trying to take a company away from the person who created it. The only way this can work is if he steps down willingly! Otherwise it cannot.
@Drew Look at facebook, I think this is the opposite of your retort.
BitTorrent.com’s cooperation will have absolutely no effect on the use of BitTorrent as a protocol - that’s the beauty of the protocol in and of itself. I would be willing to say 95% of the protocol usage has never even visited that website - I know I haven’t.
Napster was a proprietary vehicle onto the download freeway, BitTorrent is an express route built on top of it.
^edit, I mean Seth… Gosh I need some coffee.
change is good!
Bram Cohen is a brilliant guy and I’m sure that we will listen again about him very soon
Wow, I still cant believe they generated 2 million off his face and asking for donations. hah
I’m sure Bram Cohen will trouser a huge wad of cash that will make his ouster bearable.
taking bram cohen out of bittorrent is not a good idea…the founders are the heart/brain of startups….if you take them out ..they(startups) dont survive long…that was what happened to apple initially when they had taken steve jobs out of his job in apple in a board-room coup in 1985..apple lost its soul…it really came back when they bought him back…the lbo/private equity guys know nothing about why somebody starts a startup..they are in there for the money…and while they have their money …they want full control…that is not always good for the startup..
I’m still baffled by Bram and Ashwin’s decision to create a content company (destination site) out of one of the most disruptive pieces of technology in the last decade. BitTorrent is a groundbreaking protocol that radically changes the economies of wide-scale rich media distribution, yet it lacks an enterprise-grade and mainstream friendly platform behind it to enable content producers to manage and monetize the flow of downloadable rich media. That’s what companies like Pando (Disclosure - I’m the co-founder), MoveDigital, Solid State Networks and Participatory Culture are trying to do. Such tools are the missing pieces required to bring BitTorrent from DVD rips to the enterprise - where it can drive business critical applications and services.
I’m sure he will get some $$ out of the deal, at least I hope so.
I agree with Yaron , BitTorrent will never reach or attract the mainstream , i consider my self a geek and i hardly find or download stuff through it , its not user friendly app.
I like pando concept and implementation , i wish XP or Vista came (natively ) with an app like that.
It’s pretty widely known that Bram has a personality that tends towards Aspergers. I’ve heard every review of his panel speaking at conferences described as “awkward”. I bet if the investors want to keep courting huge content companies, they don’t want to have an awkward meeting kill a deal and are simply bringing in seasoned management to run the place. Bram’s a great programmer, and would make a good CTO but sometimes geeks should let their companies be run by business people.
BitTorrent is making a real effort to stay legitimate and in favor with the RIAA and MPAA, which of course doesn’t sit well with the majority of the world’s 70 million BitTorrent users.
What on earth are you talking about? This is like saying “SMTP/WWW/FTP.com is making a real effort to stay legit, annoying all the users of SMTP/WWW/FTP”
Reminds me of the hype surrounding MP3.com and an analyst saying “wait till you hear their technology”
Can somebody please stop those pando lamers from spamming blogs with their own faux-posts about how pando is great?
just whoring your tech with no dignity shows just how lame you guys are
“protecting the neighborhood”
I would like to see more uses of Bittorrent around the internets. Xbox live wouldn’t have come down last week if they did. I hope Bram gets his pay day. I don’t want a brilliant programmer runing a company anyway, he is now free to go find another project to sink his teeth into.
Pat, Bittorrent has a long way to go to become mainstream and thats what this companies goal is I hope.
Hi - Yaron from Pando here. What spam faux-posts are you referring to? I clearly disclosed that I am from Pando in my post above and merely added our perspective (as well as 3 other companies working with BitTorrent).
Mo money, mo problems. See what happens when you deal with VCs kids!
News flash everyone….Bram isn’t leaving BitTorrent. The rumor is false…
If as the NY Times reports BitTorrent “now accounts for 40 percent of all online traffic” maybe they should pay some surcharge and give the rest of a rebate on our badwidth costs.
The only problem I have with this is it sounds like your saying they are firing him, meaning he isn’t the one getting a bunch of money for it. Now if he sells it, or his share of the company, then that works out I guess but I will be sad if he is replaced and his own coworkers kick him out.
Also, saying that serving content won’t help in making it a marketable technology is completely false. If they implement it into standalone DVD players or whatever they could have their suppliers on an iplist or something and have certain ports dedicated to certain devices and/or manufacturers so the content would be managed much more efficiently. Plus since it would be legal to have the content on the suppliers servers there would be a lot less hassle.
It would probably be a wise business move for lots of content distributors too because they wouldn’t really need giant new servers in a certain area, they could just use the extra servers or bandwidth throughout their company network throughout the world, not dependent on a certain corporate office or headquarters… That would keep costs to a minimum and profit to a maximum. People will pay if those prices are kept towards the cheap like they are promising. Plus they could start releasing content with uncompromised quality like full 9gb dual layer versions of movies if they add harddrives or something to their dvd players/dvr devices.
The possibilities are endless but only if it’s done in the right way from the beginning.
Anothet example of VC / MBA idiotism.
Bran Cohen is a genious- he ALONE wrote an program that accounts for 50% of the ENTIRE internet traffic. Now they are firing him!
Now let’s laugh and see how “well known headhunting firm Heidrick & Struggles” will find somebody better!
Genious?! BitTorrent is just a ripoff of Swarmcast and Limewire (magnets). Its only popular because of piracy and I seriously doubt the users are going to want to pay for DRM’d movies.
Lame: UUCP did all this multi-path p2p stuff in the 70s. and of course kazaa-esque things were around before BT as well. what Bram did, was hit the sweet spot. and that takes a certain talent (or luck). pumping 25 million into the bittorrent.com portal site is pretty much insanity though.
Bram has told p2pnet.net that he is not leaving. It could be a lie but what proof does techcrunch have that he is being replaced as CEO? If he does get squeezed out he’s a fool. He should have never allowed navin to weasel his way into a protocol he created.
Bram is an excellent programmer but he doesn’t appear to be smart enough to keep the sharks at bay. First navin, then deals with hollywood cartels…what a shame.
To 35. “Lame” November 29th, 2006 at 6:17 pm :
The difference between Bram and others is that -he- made the program that accounts for 40-50% of the internet traffic. I did not say that he invented p2p, or internet, or mp3 piracy. He just coded something that 80 million people wanted. That distinguishes him from the next potential hired gun from “well known headhunting firm Heidrick & Struggles” that will destroy the company.
He did make a big mistake though: there was no reason to raise 8M and then 25M for this.
He is of course not a genius, it’s called figurative speech. Nobody who does software is a genius, neither Tim Berners-Lee nor Bill Gates. Newton is a genius.
don’t hate the playrs!
Okay, so BitTorrent accounts for 50% of the Internet traffic. Does that mean BitTorrent users are ready to shoulder 50% of the cost of building and maintaining Internet infrastructure? I didn’t think so. I suspect that a good deal BitTorrent’s high performance comes simply from it’s ability to hog a greater share of Internet bandwidth from other users/applications. It is like the old trick of opening multiple simultaneous TCP connections. It works great until everyone is doing it, and then it brings performance down for everyone.
“Okay, so BitTorrent accounts for 50% of the Internet traffic. Does that mean BitTorrent users are ready to shoulder 50% of the cost of building and maintaining Internet infrastructure? I didn’t think so. I suspect that a good deal BitTorrent’s high performance comes simply from it’s ability to hog a greater share of Internet bandwidth from other users/applications. It is like the old trick of opening multiple simultaneous TCP connections. It works great until everyone is doing it, and then it brings performance down for everyone.”
I support the infrastructure of the internet by paying for my bandwidth. As bandwidth and requirements increase so do the costs respectively. The bittorrent protocol merely utilizes the bandwidth I’m (or anyone else who uses it) paying for.
You make it sound like bittorrent is some internet demon eating all the regular user’s bandwidth. Now if you are behind some crappy firewall, limited community a bittorrent’s use can drag the entire router’s speed. But that is a matter of courtesy not infrastructure.
Should founders be kept around? Absolutely.
Should they necessarily be the CEO? Depends what the company is doing.
If I developed some disruptive technology that I had already shared with the world, and now used that popularity to launch a content distribution company, I’m not sure I would want to remain the CEO either. That involves paperwork and dealing with management issues all day. I would be much more likely to a) Remain a controlling or near-controlling amount of stock and b) Work where I see myself doing a combination of having the most fun AND helping the company. In my case, probably directing technology development or something like that.
Here’s an interview with Bram focusing on his Asperger’s and his “very long attention span” which lets him do what he does.
So maybe he’s not CEO material now that they are fully commercial. Yup CTO or Chief Architect is it.