Video Site Gets $34 Million in Funding

Dailymotion SA has secured $34 million in venture-capital funding
that will allow the French start-up to expand its video-sharing Web
site as it competes against larger rival YouTube, owned by Google Inc.

The company's new funds come from venture-capital firms Advent Venture
Partners LLP of London and AGF Private Equity of Paris, a division of
Allianz AG. Dailymotion already had raised about $9.5 million in
October from venture firms Atlas Venture and Paris-based Partech
International.

Dailymotion, which is based in Paris and was launched in 2005, has
grown rapidly to reach some 37 million visitors a month. It is one of
a crop of Internet start-ups emerging in Europe, which has
traditionally lagged behind the U.S. in technology innovation and
availability of venture-capital funding.

Other start-ups that have attracted both users and investors recently
include Babelgum, an Italian Web-television firm, and the privately
held, Paris-based Netvibes, a Web site that allows users to create
highly personalized, advertising-free pages containing constantly
updated information and tools.

The $34 million raised by Dailymotion represents a sizable sum in
Europe, where venture-capital investments have traditionally been more
modest. Venture-capital investment in U.S.-based companies reached
$25.75 billion in 2006, while $5.62 billion was invested in
Europe-based companies in the same year, according to Venture Capital
Report, published by Ernst & Young LLP and Dow Jones & Co., publisher
of The Wall Street Journal.

Like YouTube, Dailymotion allows users to post and view videos on the
Internet. The site is stocked with everything from homemade clips of
pets to music videos and excerpts of TV shows. Dailymotion's executive
chairman, Mark Zaleski, said the new funds will "allow us to reach
operating profitability" as the start-up develops new revenue streams
such as video advertisements in addition to traditional banner ads.

Mr. Zaleski said Dailymotion is also seeking to negotiate deals with
makers of music, movies and TV shows to allow their content to appear
on the site legally instead of in pirated form. Dailymotion has signed
such deals with Universal Music Group and Warner Music Group.

Video-sharing sites have struggled to weed out illegal and copyright
material and often have found themselves at odds with media and music
companies as a result. In June, Dailymotion began using so-called
fingerprinting technology from Audible Magic Corp., of Los Gatos,
Calif., to help filter out illegally posted content.

Dailymotion's efforts to expand won't be easy, because YouTube is also
pushing into foreign markets. In June, YouTube launched local-language
versions of the site in Brazil, France, Ireland, Italy, Japan, the
Netherlands, Poland, Spain and the U.K.