This article originally appeared at: http://www.redherring.com/insider/1999/0224/vc-pixel.html.
Verticality funded $2.6 million of the total raised by Sunrise
The Pixel Company
rides the edge
By Georgie Raik-Allen
Red Herring Online
February 24, 1999
Entrepreneurs are always been encouraged to think
out-of-the-box, but at The Pixel Company, it's more a case of
The Seattle-based startup has found a tiny slice of unused
space on the otherwise Microsoft-dominated desktop and is using
it to grab -- and sell -- the user's attention.
Pixel has developed MySpace, a menu bar that lives in the
black space at the very bottom of the computer display. The
25-pixel control bar includes customizable TV-like channel
buttons that let users do things like click on Web sites, open
applications, and control a CD player.
Pixel operates beyond the traditional screen area by bypassing
the operating system and writing directly to the video driver of
the monitor. "We're allowing someone else to own part of the
glass without having to go through the Windows desktop,"
says CEO Tom O'Rourke.
The startup has just raised a first round funding of $7.1
million from New York-based investment bank Sunrise Securities.
The funding will be used to expand the product line from MySpace,
which lives on the bottom of the screen, to a range of products
for all four edges. The startup recently announced NetSpace,
which will live on the right-hand side of the screen and provide
content from partner Web brands such as CNN Interactive
It is also looking at developing a product called WorkSpace
for the enterprise market, so that employees can email each
other, chat, and share applications along another edge of the
Mr. O'Rourke, who sounds like he may have spent a little too
much time on the edge, says eventually Pixel products will frame
video, television, handheld, and all other types of screens, and
will remain visible while users move between the Internet,
television, and computer activities.
"We are the glueware between all new technologies,"
he boldly claims.
Maybe, but it's hard to see the masses latching onto the idea
with the same enthusiasm. The space is tiny, and except for the
ability to remain on at all time, provides no extra functionality
over My Yahoo, or any other customizable interface.
Advertisers and marketers, on the other hand, love any extra
space that may attract consumers' attention. As Mr. O'Rourke
says, unless Amazon.com
is an icon on a desktop, it can only advertise and send messages
to users when they are on the Web. With MySpace, it has a captive
audience, no matter what the user is doing on the computer.
LIVING ON THE EDGE
The Pixel Company makes money from its content partners, which
The partners pay Pixel on a clickthrough basis, as well as a
percentage of sales.
The key to profitability is broad distribution, which the
company is pursuing through OEM deals and downloads off the
Internet. So far, Packard Bell NEC, Pixel's former parent
company, and two undisclosed PC vendors are distributing MySpace,
and are using it to gain visibility and develop marketing
It's too early to tell how the edge of the screen will be
exploited, but Pixel insists the one sliver of space not
controlled by the startup's Redmond neighbor is a valuable piece
of real estate.
"I'm sorry, Bill, but you can't control it all," Mr.
O'Rourke says. "There is a vacuum of opportunity outside a
box called Windows."
That may be so -- for now -- but in the meantime, the desktop
still belongs to Microsoft