Total Telecom

Online video service reinvents itself as technology provider for media companies.

Joost NV, an online video service launched by the founders of Skype, is retreating from the consumer market and replacing its high-profile chief executive.

The New York-based company, which provides television programming over the Web, said it would reinvent itself as a technology provider that will enable media companies to publish Internet video under their own brands.

The move marks a dramatic shift by Joost, which was founded in 2006 but failed to live up to its early hype. Internet users have instead flocked to Google Inc.’s YouTube for user-generated content or sites like Hulu LLC, a joint venture between News Corp., General Electric Co.’s NBC Universal and Walt Disney Co. dedicated to TV programs.

“In these tough economic times, it’s been increasingly challenging to operate as an independent, ad-supported online video platform,” said Mike Volpi, who will step aside as Joost’s chief executive as part of the restructuring.

Mr. Volpi will be replaced as CEO by Matt Zelesko, senior vice president of engineering. Mr. Volpi, a key architect of networking giant Cisco Systems Inc.’s acquisition machine during the dot-com boom, will remain chairman of Joost’s board.

Mr. Volpi said the changes will result in layoffs but didn’t say how many people would be leaving the company. Joost employed about 100 people prior to the restructuring.

Joost was founded by Niklas Zennstrom and Janus Friis, creators of Internet telephone service Skype, but the company got off to a rocky start largely because it required users to download software, while rivals such as YouTube and Hulu let people stream video directly from Web sites.

Mr. Volpi joined the company two years ago and his first order of business was to relaunch Joost as a streaming Web service, but that improvement wasn’t enough to overcome the company’s early missteps.