Yahoo shelving Maven Networks’ video platform

Updated with comments from Yahoo

Yahoo reportedly plans to shut down the video platform built by Maven Networks, the video startup Yahoo acquired for $160 million at the beginning of 2008, according to TechCrunch.

Maven offers video hosting and ad insertion to large media companies. Before the acquisition, the company said it was growing quickly and could deliver its services at a tenth of the cost of the competition. There were, however, reasons to be skeptical about the deal, such as the relatively low cost of the acquisition, the many rival video platforms, and the question of whether Yahoo could effectively serve the same large media companies that it also competes with.

Whatever the reason, it now sounds like Yahoo and Maven were a bad fit — for one thing, Yahoo never used Maven’s technology on its own video sites, a source tells TechCrunch. Plus, Yahoo’s new chief executive Carol Bartz has been trying to streamline the struggling company. So most of the Maven team has been laid off, and Yahoo is telling Maven customers it will stop supporting the platform in 2010.

I asked Yahoo for confirmation or comment, but I haven’t heard back yet.

Update: Yahoo spokesman Brian Nelson sent me the statement below, which confirms Yahoo is preparing to end its Maven Networks contracts but also suggests the technology isn’t being abandoned as TechCrunch reported. He also said the rumor that Yahoo has laid off most of the Maven team is incorrect.

Since acquiring Maven Networks in 2008, Maven has played an important role in our video strategy, providing essential talent and core technology that has helped Yahoo! to enhance its consumer and advertising offerings. Maven technology is used in the Yahoo video player, as well as in the Yahoo Video Advertising Platform that is being used to serve both on- and off- network advertising for Yahoo! partners.

While video initiatives remain a priority for Yahoo!, both for its consumer and advertising experiences, we are increasing investment in some areas while scaling back in others. After careful consideration, Yahoo! is planning to wind down its Maven Networks contracts. This decision will allow us to focus our resources on the continued improvement of our core video offerings, such as enhancing the consumer video experience on Yahoo!.

Since Q4 2008, we have closed or announced our intention to close, nearly twenty Yahoo! services– such as Yahoo! 360, GeoCities, My Web and Yahoo! Briefcase. We continue to evaluate our portfolio of products and services on a regular basis, and plan to share details of further changes with people who use our products in the months ahead.