Their website, http://eyespot.com/ , as of now, simply says:

“We deeply regret to inform you that Eyespot has ceased all operations.

We have spent three years providing over a hundred thousand of you with a unique video experience. We believed that by putting creative tools and rights-cleared media into the hands of influencers and connectors, Eyespot would enable social media and participation culture like no other company.

After playing over two hundred million of your video creations, we have to stop. After assembling possibly the most potent team in digital media ever, we’re now moving on.

Thank you all for being part of our community over the past three years.” –The Eyespot Team

And from http://www.techcrunch.com/2008/10/02/deadpool-eyespot-closes-its-eyes/ I gather:
“Eyespot raised $3.7 million way back in October, 2006 for its Web-based editor that makes it easier to create video mashups. But the Web video editor space soon got crowded, and there are only so many buyers. (Yahoo eventually acquired competitor JumpCut, for instance).

One tipster tells us that Eyespot was on the verge of selling itself, but the M&A deal fell through at the last minute. With no cash left, the company had to shut down and let all 22 of its employees go on Monday. The site, though, is still up. Anyone in San Diego looking to hire should contact David Dudas.”

DaveK