The European entrepreneurs Niklas Zennstrom and Janus Friis have assembled a team and are now in negotiations with partners to launch a new TV venture called “The Venice Project”. Zennstrom and Friis have an impressive track record after creating two of the world’s most popular webservices in the file-sharing network Kazaa and IP-telephony network Skype.

There have been rumors circulating for a few months about Zennstrom and Friis working on a new venture in one of the hottest areas of new media – Internet TV. Today Business Week reports that they have sources that confirm that Zennstrom and Friis have “assembled teams of top software developers in about a half-dozen cities around the world, including New York, London, and Venice” and already have been in negotiations with several companies to develop software for distributing TV shows and other forms of video over the Web.

Skype was acquired last year by eBay for $2.6 billion in cash and stock and an additional $1.5 billion in bonuses that could be paid out to its founders by 2009 if they stay on with eBay. However, it is not clear if eBay will be an investor or partner in Zennstrom and Friis’ new venture.

“We have encouraged those guys to explore different ideas and different concepts that they find interesting," says eBay spokesperson Hani Durzy to Business Week.

If Zennstrom and Friis want to launch “the Venice Project” without eBay, they are walking away from a hefty bonus, but it should not present too much of a problem. The two entrepreneurs should have easy access to capital with their track record of starting successful new companies and at this point in their career they are set financially and are probably not very risk adverse in exploring new opportunities.

My Take: There are a lot of Internet TV companies out there, YouTube perhaps being the most successful, certainly the most widely used. At investment banker Herb Allen’s recent industry conference in Sun Valley, Idaho, Internet TV was the hot topic and clearly in the spotlight of investors and media companies alike.

The real question is if Friis and Zennstrom are too late to the table this time? I don’t think so. Internet TV and video on-demand are a booming growth businesses and will continue to be so as traditional media companies learn how to mine their archives, catch the long tail and find new working business models for the digital era.

Friis and Zennstrom are successful opportunitists and they likely to offer an Internet TV service with a twist.

Judging by their past ventures, they will probably have a superior technical solution as well as a smart way to get around copyright restrictions. That is what they did when they launched their file-sharing network Kazaa. I suspect that they also have become so business savvy at this point that they have a built in business model that will play into the hands of media companies and content owners as well as consumers. 

Moreover, what has made YouTube so successful is all the user generated content available and added daily as well as ease of use. I’m sure that Friis and Zennstrom are hard at work thinking about how to leverage the social networking trend as well in their new TV venture. It is clear that in both cases of Kazaa and Skype, it is the networking effect that is making the services so popular. If no one else had Skype, who could you call?

So, “The Venice Project” could have a lot of potential and it would certainly be interesting to see which traditional TV companies dare to partner up first with these two entrepreneurs that have become synonymous with disruptive technology and piracy.    

Related Links:
Kazaa, Skype, and now "The Venice Project (Businessweek)