Founded in 1998 by Adityo Prakash and Eniko Fodor, Pulsent has raised about $33.5m in two rounds of funding from JP Morgan Partners, Oak Investment Partners, Polycom and Index Ventures, among others. Pulsent has created more than just a compression algorithm, Prakash said. It is also engineering a multimedia chip to carry its video format that will include support for MPEG-1, MPEG-2 and MPEG-4. The company has plans to unveil other technology down the road aimed at solving Internet video delivery problems such as packet loss, congestion and buffering. For now it is interested primarily in showcasing its video codecs, or the mathematical formulas that are used to squeeze data out of files without significant loss of viewing quality. Here Pulsent claims that it has departed completely from the MPEG framework developed in the past two decades. According to the company, MPEG technology uses a grid system that breaks each video frame into small pieces and uses them as the building blocks for an image. Pulsent focuses not on blocks but on what it calls "intelligent objects" on the screen. Pulsent's objects do not correspond directly to physical objects such as a car or a building. Rather they represent logical groupings that might capture the folds in a shirt, for example. Each physical object may be represented by dozens of such visual objects. According to Pulsent, the technique provides a powerful shorthand that overcomes many of the problems in block compression. MPEG-4 also makes substantial use of objects, but it uses them in a different way, Prakash said. While MPEG-4 adds an object layer on top of an underlying block grid structure, he said, Pulsent makes objects the basic building blocks for the image itself. "We were going down uncharted territory so we had to create our own way to navigate it," Prakash said. Prakash said Pulsent is currently negotiating with major telecommunications companies to license its technology for use in a comprehensive service offering video-on-demand, cable programming and Internet access over DSL lines. Nevertheless, analysts said Pulsent's acceptance in the marketplace remains uncertain. "The company's biggest obstacle is signing up a big customer, such as a DVD player manufacturer, a video manufacturer, or a set-top box maker offering on-demand videos," Kaufhold said. "The market that Pulsent is aiming for is a late 2003 market, when on-demand video services will likely take off and the movie studios will start making their good content available."
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