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Since early on in its testing phase, I found Joost to be a compelling take on Internet Protocol Television (IPTV). Let me rephrase: I found the idea of Joost to be compelling. It offered free video content on the web in a way that was somewhat similar to a television experience but added the interactivity that the web offers. The service’s problem was in its execution — namely that it required a seperate desktop client to use. That will soon no longer be the case.

Joost will cease making its desktop client and shift strategy to making its content available within the web browser, GigaOM’s Om Malik has learned. The new strategy apparently will call for a browser plug-in that will allow the service to continue using peer-to-peer (P2P) approach to distribute content.

The problem with this shift in strategy now is that there is a major player already doing what Joost intends to do: The NBC and Fox-backed Hulu. Hulu has had a few months head start to gain users and steam and simply kills Joost in terms of content. Whereas Joost has some compelling shows from stations like MTV and Comedy Central, Hulu has the big hit shows from NBC, Fox and others. It has several feature films as well.

Joost still has a small window of opportunity however as Hulu is still only available to web users in the United States.

The other problem is that by using a plug-in, Joost is still limiting its potential audience. A plug-in likely means Joost will be meant to work in Mozilla’s Firefox and Microsoft’s Internet Explorer web browsers. While these are by far and away the two most dominant browsers, not everyone uses them. Further, not everyone is going to want to download a plug-in for them. Hulu doesn’t require a plug-in, just Adobe Flash, which is already standard on almost all computers.

So while this move to the browser is a smart play for Joost, it in no way ensures success. The company took a gamble on a desktop client and lost. Joost’s model could also run into problems if other Internet service providers (ISPs) start following Comcast’s lead and putting caps on data downloads.

Still, IPTV is a young market and Joost has some options. While we’ve known since March that a browser-based version of Joost was in the works, something else that was talked about that I found compelling was the possibility of live sporting events on Joost.

I would also recommend that Joost tries to get on one of the living room boxes such as Roku, quick. I think Joost realizes that, hence their partnership on Yahoo’s upcoming Widget Channel, which will bring Internet content to televisions in the living room.

Joost, which was started by Niklas Zennstrom and Janus Friis (two of the men behind Skype), raised $45 million in funding back in May of 2007. The lead investors were Sequoia Capital and Index Ventures. CBS Corporation, Viacom and the foundation of Chinese billionaire Li Ka-shing also participated.

Update: TechCrunch has a video of the new browser-based Joost (currently testing in closed beta) in action. One interesting element is the social networking features it now uses. See the video below.

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