Tuesday, July 24, 2007

DivX Spins Out Digital Media Firm

San Diego-based DivX, a provider of video encoding technology, said today that it is planning to spin out its Stage6, social media site as a private company. The firm said that it is looking to maximize the value and growth potential of the company by focusing on its technology licensing business. Stage6, which provides social media and video sharing, will be headed by DivX co-founder Jordan Greenhall, who will be stepping down as CEO of DivX. According to the firm, the separation of Stage6 from DivX is expected to be completed later this year. Kevin Hell, the existing President of DivX, has been named Acting CEO of DivX. According to the firm, Stage6 has been driving a significant increase in the operating expenses of DivX, and has been impacting the firm's operating income; the firm said that Stage6 will require substantial additional financial investment to continue its traffic growth.