Video startup Waywire kept a low profile even with a roster of investors that includes talk show host Oprah Winfrey and Google Inc.’s Eric Schmidt. The company can thank Newark Mayor Cory Booker for its newfound notoriety.
Started last year, New York-based Waywire lets users create, share and find videos and organize them into channels that others can follow. It’s competing for consumers’ attention in a crowded market where everyone is chasing Google’s YouTube.
Waywire has yet to publicly introduce its product. Even so, it was thrust into the limelight after Booker, in his campaign for a New Jersey seat in the U.S. Senate, disclosed a stake worth up to $5 million, and reports emerged that Andrew Zucker, son of Cable News Network President Jeff Zucker, abruptly resigned from the advisory board. A bigger concern is whether the site can attract users.
“Consumers already have an abundance of ways to discover videos” said Clark Fredricksen, a vice president at researcher EMarketer Inc. in New York “The video-viewing world is so dominated by YouTube, it’s hard to see other companies gaining share.”
While Waywire has remained mum about its business model, the company said in a slideshow in April that the site will provide opportunities for advertisers to show branded content. The number of registered users has increased to 29,000 from 7,500 in April as part of its initial trial, according to Michele Clarke, a spokeswoman for Waywire. The company is partnering with content sites like HuffPo Live and Slate.
More than 1 billion unique users visit YouTube each month. Meanwhile, Facebook Inc. is gaining popularity as a video site and startup Ustream Inc. said last month that it streamed more than 7 million live videos in the first half of the year.
Waywire was co-founded by Booker, former Gilt Groupe Inc. executive Nathan Richardson and former Yahoo! Inc. executive Sarah Ross. Investors include Winfrey, Schmidt’s Innovation Endeavors and venture firm First Round Capital. Its advisory board features former CBS News anchor Dan Rather and AOL Inc. Executive Vice President Susan Lyne.
Zucker, the teenage son of CNN’s president, resigned yesterday to “avoid even the perception of a conflict of interest,” according to Allison Gollust, a CNN spokeswoman.
Booker, the 44-year-old Democrat, listed in a report to the U.S. Senate on July 12, a $1 million to $5 million interest in Waywire. A similar number surfaced on Aug. 6, a week before the Democratic primary for the Senate race, in a report Booker filed with Newark.
For Booker, who took up residence in a violence-plagued high-rise after moving to Newark in 1996, being a known technology millionaire could tarnish his image as a politician who relates to the poor. More than a quarter of Newark residents are impoverished.
The disclosures don’t indicate what percentage of the company Booker owns. As an unproven company with no name recognition and a host of competitors, turning Booker’s paper worth into cash will be a challenge.
“It’s obviously well-connected, but it’s an early-stage startup,” said Brian Wieser, an analyst at Pivotal Research Group LLC in New York. “It doesn’t mean it’s going to be a good business.”