Veoh declared bankruptcy yesterday and laid off the last of its employees. For those of us who follow the online video industry closely, it wasn't a huge surprise, as Veoh has struggled for a while to find a business model while facing Universal Music Group's relentless copyright challenge (in which Veoh ultimately prevailed). Veoh's failure is a cautionary tale that even an early start, $70 million invested from blue-chip backers and strong user support aren't necessarily enough for success.

Veoh lived in YouTube's shadow from day one, and as it became apparent that UGC was a winner-take-all market which YouTube had won, Veoh scrambled for a new opportunity. It discontinued support for adult content, which alienated a core group of its users. It pushed to be an aggregator for premium video, sealing partnerships with CBS, MTV, Lionsgate, PBS and others, while continuing to attract independent content. But it got squeezed when Hulu appeared on the scene, which quickly became the de facto destination for premium programming. Veoh's last stand was promoting its "Video Compass" browser plug-in offering enhanced video discovery. A neat feature, but clearly not enough to build a company around. R.I.P. Veoh.

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