Joust at Joost Bears Watching

Mike Volpi made his industry bones as Cisco Systems’ preeminent wheeler-dealer during the networking giant’s frenetic run of acquisitions through the mid-to-late 90s and slightly beyond. At the risk gross understatement, I would say those were better times than the current dark ages for people who engage in that sort of high-octane dealmaking,

No fool, Volpi recognized the end of an era when he saw one. For a time, he became a business-unit VP at Cisco, with all the responsibilities that such a job entails, before leaving Cisco in 2007 to park himself briefly in the venture-capital community while waiting for an opportunity to run a startup company.

He didn’t wait long. Volpi got his chance with Joost. a much-hyped online-video site that was launched by Niklas Zennström and Janus Friis, the technological tandem behind previous P2P phenomena Kazaa and Skype. Given the accomplishments and past performance of the founders, Joost was handicapped to succeed in a packed field of video-site contenders.

Joost never did make a serious run, though. It was an underachiever from the outset, and it now seems destined for an ignominious end.

Nonetheless, the drama surrounding the company and its erstwhile principals is far from over. In a statement issued to the Wall Street Journal and other media recipients, Joost announced the following:

“Mr. Volpi was removed from the board of directors and from his position as chairman of Joost by shareholder vote. The company and its board of directors is conducting an investigation into Mr. Volpi’s actions during his tenure as CEO and as chairman.”

Previously, it was assumed that Volpi first resigned as CEO, then later gave up his role as board chairman. After relinquishing the CEO role, Volpi took a gig as partner at venture-capital firm Index Ventures, which, like Joost, is based in London.

Index Partners was a player organizing the group of investors that is attempting to acquire Skype from eBay. It is Volpi’s role in that pending transaction that seems to have triggered the antagonism of Zennstrom and Fris ,who still control ownership of Joost and were involved with a competing bid to wrest Skype back from eBay.

Much remains unknown about the nature of the investigation Joost’s board of directors is pursuing regarding Volpi’s actions as CEO and chairman of the company. It is apparent that the board suspects Volpi of skullduggery, but, beyond that, the situation is clear as mud.

It’s a situation that bears watching, however. Zennstrom and Fris also control a company, Joltit Limited, that owns P2P technologies leveraged by Skype and Joost. In an SEC filing, that company is mentioned as a potential irritant in the consummation of eBay’s sale of Skype.

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