TokBox Shutters Consumer-Facing Live Video Chat Platform To Focus On Building Out API

Video chat startup TokBox is announcing a significant transition in its business today. The company is announcing that it will be shuttering its consumer-facing web-based video chat application, and focusing on building out its recently launched API has a business.

TokBox’s multi-user video chat from the browser has close to 2 million registered users. However, TokBox has been on a bit of a roller coaster rise with the video chat technology as its main product. In 2009, forced to fire 30% of the company’s total staff and shuffled the executive lineup. In the search for more revenue, TokBox unveiled paid features on its platform in early 2010.

In November of last year, TokBox raised $12 million in new funding from Sequoia and others and opened up its API, called OpenTok. The platform allows businesses and developers to weave live video chat throughout content on a web page or site. Developers can place up to 20 video participants on a given page with the technology.

Since November, OpenTok has been adopted by 28 partners and the company has decided to shift from the consumer-facing video chat/conferencing space to focus on OpenTok as a business model. TokBox’s current video chat services will close down on April 5, 2011.

For now, OpenTok is free but the company plans to add premium services in the API (which apparently there is a demand for from current customers). Another revenue stream, says the company is advertising within video streams. And TokBox says that a number of well-known brands will be using the API in the near future.

So what do you think—can TokBox pivot?