Sep 18, 2006

DivX Set to Go Public Next Week

Video Impression Company

DivX, the video compression company that went from public enemy
No. 1 in Hollywood to a trusted partner, will hold a public offering next week.  The San Diego-based company plans to sell 9.1 million shares for $12 to $14 a share.

Revenue for the first six months of 2006 camed to $27.2 million, while net income was $5.9 million.  In 2005, annual revenue was $29.3 million and net income was $2.3 million.

The DivX video compression technology offers DVD quality at 10 times the compression of traditional MPEG-2 files, enabling a full-length film to fit on one CD or eight films to fit on one DVD.   More than 50 million DivX-certified devices have been released.  

DivX does for video what the popular MP3 audio standard does for music, allowing people to create and play copy-protected video that's small enough to be easily distributed over the Internet and played on a variety of devices.

Initially, studios complained that consumers used the company's software to trade copyrighted video.  The company subsequently added copyright protection technology.   That led to deals with consumer electronics companies--which bundled the software so consumers can play DivX-compressed video--and film studios.  The company's dream is to get studios to distribute their films over the Web with its software.

DivX is big in Europe, in part because the technology originated in France, executives at the company have said. 

The company was founded  in 2000 and has more than 200 empoloyees.