I guess it’s Yossi Vardi Startup Day here at TechCrunch. The prolific Israeli investor behind ICQ is now backing a video chat service called SeeToo that was founded in January, 2007. SeeToo closed an angel round of about $1 million a month ago, and Vardi is the biggest investor, as well as an active board member. The NYC-Israeli startup quietly launched a private beta last week, and we have 500 invites for the first TechCrunch readers to sign up.
The basic concept behind SeeToo is a shared chat room where you can watch a video simultaneously with the person you are chatting with. This is intended for personal videos of your child or travels, rather than for Hollywood movies to watch together with a friend, although that would be technically possible as well. Yoav Ilan, head of marketing and biz dev, took me through a live demo earlier today. 
He showed me a video of his 7-month-old baby and one of a big yacht he videotaped from his apartment in New York. As the video was playing, we were typing away underneath in a chat box. I didn’t have to download anything. I just clicked on a Website link he e-mailed me, and it worked.
SeeToo is not alone in combining video and chat in this way. PalTalk allows simultaneous shared viewing of a video in a chat room with a lot more people than SeeToo currently supports (which is only two parties, for now, but that may change). And you can do something similar with Meebo Rooms, which lets you watch YouTube and other embeddable videos with a bunch of friends.
SeeToo could easily add more people to a chat, and is looking into it. But the main difference is SeeToo’s clever use of peer-to-peer technology. You never upload a video. Instead, if you want to share a video, you download a small 600 kilobyte app that takes any video on your desktop, compresses it, and streams it right from your computer to the SeeToo Web page that is hosting the chat. The application is currently only available for Windows, but a Mac version is due out next year.
When the chat is over, the video disappears from the Web (it remains on your computer). The yacht video, for instance, was a 120 MB file. SeeToo does not need to host or store any videos, and consumers don’t need to wait for the videos to upload before they can share them. The simplicity of the service is the best thing going for it.