Joost in Time

They're growing up so fast these days. Joost, the video-streaming site that has won over fans with its slick television-like interface and networks with its security controls, has now lapped the million-user mark.

The announcement came during a Skype publicity event in Estonia. Yes, eBay (Nasdaq: EBAY) owns Skype. No, it doesn't own Joost (not yet, anyway). It's just that Joost's founders happen to be the same two guys that brought us Skype and peer-to-peer file-sharing platform Kazaa.

You can't blame them for being followed around. Few people catch lightning in a bottle twice, much less thrice.

Joost has a bright future. I've been kicking the tires as a beta tester for a couple of months now. The full-screen quality is far better than what you get with the compressed flash uploads from Google 's (Nasdaq: GOOG) YouTube. The company's ability to strike content deals with companies like YouTube thorn Viacom (NYSE: VIA) has populated the site with an eclectic yet ultimately entertaining collection of television shows.

I wouldn't brand Joost a YouTube killer the way some folks have. It's an entirely different experience. YouTube is an upload-laden community, rich with brief clips from webcam hobbyists, amateur filmmakers, and product-promoting partners. Joost is a closer substitute to the more conventional television viewing experience.

Monetizing a free site like Joost is the key. Ads have started to creep up into the content, typically brief spots between shows or a small embedded brand graphic during a stream. Advertisers are flocking to Joost, and why not? If audiences are spending time on Joost -- rather than parking themselves in front of the television set in the living room -- sponsors have to follow suit.

The company plans an official launch later this year. An IPO is probably not too far away. The company has already tapped venture capitalists for seed money, raising $45 million back in May. Last month it installed Mike Volpi, a seasoned Cisco (Nasdaq: CSCO) executive, as its new CEO. These are the kinds of moves that typically lead to an IPO filing.

Until then, Joost has been loosely handing out more beta invitations. The next million should come quicker than the first batch. If I'm YouTube, I'm not worried. If I'm a major network executive, already biting my fingernails to the bone over folks spending more time on social networking sites or playing video games, I'd start nibbling even harder.