tsx nln industry video technology successor rovi founded 1999 headquarters san diego california usa key people kevin hell jerome gej vashisht rota products divx software for windows divx pro for windows divx software for mac divx pro for mac parent neulion inc. website www.divx.com part of a series on divx divx divx inc. dr. divx divx plus hd stage6 v t e divx headquarters in san diego divx inc. now divx llc and also formerly known as divxnetworks inc. based in san diego california is a subsidiary of neulion inc. as of january 2015 . 1 divx llc is best known as a producer of three codecs an mpeg 4 part 2 based codec the h. 264 mpeg 4 avc divx plus codec and the high efficiency video coding divx hevc ultra hd codec . the company s software has been downloaded over 1 billion times since january 2003 . 2 divx llc s offerings have expanded beyond the codec to include software for viewing and authoring divx encoded video . divx llc also licenses its technologies to manufacturers of consumer electronics devices and components used in these devices of which over 1 billion divx enabled devices 3 have shipped worldwide . divx certifies that these licensed products are able to properly play divx encoded video . contents 1 history 2 revenue streams 3 stage6 4 acquisitions and investments 5 awards 6 stock price 7 initial funding 8 references 9 external links history edit the origin of divx inc. began with video engineer jerome rota aka gej who made the original divx ; codec available on his personal website after he had reverse engineered the microsoft mpeg 4 v3 codec . gej was looking for a way to compress his portfolio so he could transmit it using the audio video interleave file format avi . 4 the codec became popular because it enabled reasonable quality video transmission over the internet see divx . co founder jordan greenhall a former mp3.com executive learned of the codec from friends and used it to download a copy of the matrix . 4 greenhall eventually got in touch with gej through an underground dutch hacker group after a multi month search . 4 in early 2000 greenhall put forward the idea of using the divx ; codec to found a company . with co founders joe bezdek darrius thompson and tay nguyen greenhall and gej created divxnetworks inc. after coming under scrutiny for the original divx ; codec which was not a clean room design codec divxnetworks created a new clean room codec . 5 divx inc. incurred net losses from its creation through the second quarter of 2005 . 6 the company was profitable for fiscal years 2005 07 . 6 divx inc. went public on september 27 2006 . in december 2006 divx inc. was added to the russell 2000 and russell 3000 indexes . 7 in october 2010 sonic solutions completed their acquisition of divx . 8 in february 2011 rovi corporation acquired sonic solutions including the divx business . 9 in april 2014 rovi corporation sold the divx and mainconcept business to parallax capital partners and stepstone group . 10 in february 2015 neulion inc. acquired divx llc . 11 revenue streams edit divx llc licenses its technologies to manufacturers of consumer electronic devices . divx llc also licenses its technologies to manufacturers of integrated circuits designed to be used in consumer electronic devices . for example on september 12 2007 divx inc. announced a licensing agreement with qualcomm that allows the chip manufacturer to include divx inc. s technology in its video enabled chipsets . 12 in addition to licensing divx inc. also certifies devices that can encode and or play back videos using the company s codec according to divx inc. s standards . the company has certified dvd players digital televisions digital cameras portable video players and portable video recorders . divx inc. s partners have shipped over 1 billion certified consumer electronic devices representing over 2500 product models . 3 partners include lg electronics philips electronics samsung electronics and sony electronics . the licensing and certification agreements that divx inc. strikes with its partners usually entitle divx inc. to receive a per unit royalty for every device shipped that incorporates divx inc. s technology and is certified by divx inc. approximately 75 % of all royalties divx inc. received are for products sold in countries outside of the united states 6 as divx encoded video is more popular in certain regions outside of the united states than it is in the united states . royalties resulting from licensing are approximately 1 to 2 per unit shipped . 13 prior to november 2007 divx inc. also received revenue from google by providing the option to download the google toolbar when downloading the divx player from the company s website . in november 2007 divx inc. s contract with google expired and the company started distributing a co branded version of the yahoo toolbar and a version of internet explorer 7 that was pre configured with yahoo tools . 14 divx inc. s financial reporting for the third quarter of 2008 indicated that the yahoo deal was proving to be more lucrative than the previous google deal . 15 soon after the company reported third quarter results however yahoo advised divx inc. that it would cease making payments under the contract . 16 divx inc. responded by suing yahoo in california superior court seeking damages and specific performance of the contract . 17 the company acknowledged though that its breach of the prior contract would materially affect its financial performance for 2008 and 2009 . in the first nine months of 2008 the yahoo deal accounted for 21 % of divx inc. s revenue . 15 divx inc. and yahoo settled their dispute in august 2009 . 18 under the settlement yahoo paid 9.5 million to divx inc. 18 in march 2009 divx inc. entered into a new promotion and distribution agreement with google . 18 under the agreement divx inc. would distribute google products such as the chrome browser and google toolbar along with its own products and would receive fees from google for successful activations of these products . 18 stage6 edit main article stage6 stage 6 was a user generated content site run by divx inc. that was similar to youtube but that allowed for uploading and viewing of high definition video . anyone could upload a video to stage6 and make it available for viewing for free . all videos on stage6 were playable on all consumer electronics devices that divx had certified as being capable of playing divx encoded video . stage6 contributed to divx.com becoming one of the top 200 most visited websites according to the site alexa.com . 19 stage6 received a very good rating from pc world magazine . 20 on september 6 2007 divx inc. filed a declaratory judgment action in federal district court in san diego against universal music group inc. 21 in the lawsuit divx inc. sought a declaration from the court that divx inc. s operation of stage6 fell within the safe harbor protection provided by the digital millennium copyright act for hosting websites against claims of copyright infringement . 21 previously umg had demanded that divx inc. take a license from the company to cover works on stage6 that it owned and in addition pay umg 30 million for past damages . 22 on october 16 2007 umg filed an action against divx inc. in federal district court in los angeles for copyright infringement . umg then moved to have the san diego action dismissed in favor of the los angeles action . on february 5 2008 the judge in the san diego action granted umg s motion to dismiss . 22 on july 24 2007 divx inc. announced that it intended to separate stage6 into its own separate private company because stage6 s success has resulted in significant expenses that have impacted divx inc. s bottom line . 19 in december 2007 divx inc. announced that it needed additional time to consider the alternatives available to the company with respect to the future of stage6 . 23 on february 25 2008 divx inc. announced its plan to permanently shut down stage6 on february 28 2008 instead of selling it or spinning it off . 24 prior to the decision to close the site disagreements within divx inc. on what to do with site appears to have led to the resignations of senior personnel including co founders jordan greenhall and darrius thompson . 25 acquisitions and investments edit in august 2007 divx inc. announced that it had acquired the assets of veatros llc a lawrence kansas based company . 26 veatros developed video processing technology at the university of kansas information and telecommunication technology center . 27 the technology can be used for video search and discovery . the deal was for 2 million in cash plus an additional 2.5 million upon completion of certain technology related milestones . 28 in november 2007 divx inc. purchased aachen germany based mainconcept ag . 29 divx inc. paid 22 million for the company and will pay up to additional 6 million upon the completion of certain milestones in 2008 . 30 mainconcept developed and distributes one of the most popular codecs using the h. 264 standard . awards edit divx inc. was ranked no. 1 in entrepreneur magazine s hot 500 list for 2007 . 31 stock price edit since the company went public in september 2006 its stock price has disappointed many . the ipo price for the company s shares was 16 . the price initially rose quickly as a result of positive reports from financial companies initiating coverage of the company and a favorable commentary on the stock by jim cramer on his popular television show mad money . 32 the stock rose to over 30 per share . cramer s view soon soured however . 33 in april 2007 the company s cfo resigned . 34 shortly afterward the company announced earnings for the first quarter of 2007 that were below analyst estimates even though management had earlier made a rare positive preannouncement on revenue . 35 this combination of events contributed to a slide in the stock price to a level below the ipo price . uncertainty about the company s future has kept the stock price below the ipo price the stock closed on may 14 2009 at 4.79 . a number of factors have contributed to the uncertainty weak guidance from management resignation of key personnel the shutdown of stage6 serious competitive threats and a slowdown in the market for dvd players which are a major source of the company revenue . initial funding edit in september 2000 zone ventures of los angeles california as well as tim draper and several other investors from the draper fisher jurvetson family of funds provided the initial round of investment . on june 4 2002 divxnetworks received an additional 6 million . zone ventures was again one of the largest investors deriving funds from the wi harper group . draper atlantic and the wasatach venture fund also invested and tim draper made another personal investment . at the time this put divx s total equity financing at over 11.5 million . in may 2004 divx raised an additional round of 7 million investors included draper affiliate zone ventures wi harper group draper atlantic wasatch venture fund springboard harper tim draper cardinal venture capital ali corporation and cyberlink international technology corp. in october 2005 the company announced closing a 17 million round from insight venture partners . divx inc. raised over 108 million in its sep. 27 2006 ipo . 36 references edit drier troy . neulion acquires divx creates a full online video solution . streaming media . retrieved 8 january 2015 . https forums.divx.com divx topics divx celebrates 1 billion downloads a