The Best Euro Start-Ups

Too often, the phrase "pan-European enterprise" conjures up visions of disasters like the Airbus A380. In the right hands—small entrepreneurs as opposed to state-run mega-projects—the Pan-European approach has produced a string of high-profile media and telecom successes that includes the most buzzed-about start-up on the planet. It's called Joost, and the hands belong to Janus Friis, a Dane, and his Swedish partner Niklas Zennstrom—tech rock stars of the first order, and Europe's answer to Google's Larry Paige and Sergey Brin.

The pair gained fame as the creators of the megahit music-sharing site Kazaa, whose popularity with users was rivaled only by the enmity it earned from music companies. Then came Skype, which rocked Big Telecom by offering cheap phone calls via the Internet. Now the duo are turning their talents to new media and entertainment. With Joost, a video sharing website, they'll offer the Web generation a new way to watch favorite TV shows—when and where they want, with picture quality worthy of a plasma screen. And while digital cable and satellite operators charge ever-rising monthly fees for the same thing, Joost will offer them for free, with a lot of social-networking features like comment posting and instant messaging. Also free. With its professionally produced content and slick controls, it makes Google's YouTube look like last year's disruptive technology.

So far, Joost consists of nothing more than a Beta version with a long waiting list to give it a spin. But it has nonetheless won some powerful partners, among them National Geographic, Warner Brothers and Viacom—which has signed on to supply not only movies from its Paramount studio, but also shows from its family of 130 channels including MTV, VH1 and Comedy Central. This alone shows how far Friis and Zennstrom have come, says James McQuivey of Forrester Research. "When they ran Kazaa, the only thing big media companies wanted to do with them was sue."

The pair sold Skype in 2005 to California's eBay for $2.6 billion—elevating them instantly to the pantheon of Silicon Valley. Yet they remain determinedly European, even down to the Dutch name (pronounced "juiced.") Home for Joost is an office in Leiden, where the CEO, a Swede named Fredrik de Wahl, leads a multinational team that includes MTV's former head of marketing and the ex-chief of the Apache Software Foundation. It has cast its organizational net wide, taking advantage of the strengths found in different spots across the continent: the unique and vital peer-to-peer software comes from its team of programmers in Estonia, the banks of servers—and Joost's incorporation certificate—reside in Luxembourg, and a London front office courts the big media companies. Does this mean the future of tech resides as much in Leiden and Luxembourg as Stanford and Sunnyvale? Not likely—but you never know.