NBC And Universal Announce Increased Online Ad Spending

Increased spending in online advertising is nothing new, but the
numbers keep climbing and the evidence continues to pile up
reinforcing that the marriages in media is only getting stronger.

Pando Launches Grid-Computing for Online Video Publishing

After its free online video publishing and sharing service drew eight
million people, Pando Networks Inc. has decided to launch a commercial
version with grid-computing technology, reports Internet Retailer.

The technology enables a large number of users to share computer
processing power, enabling them to view the same video files
downloaded from a site or streamed from a server.

This saves users from suffering content delivery problems that occur
when a mass tries downloading the same thing at the same time. It also
protects retailers from having to shoulder the cost of extra
bandwidth.

"We've talked about this on a supercomputing level, and now it's
available for retailers as well as consumers," said Founder and CEO
Robert Levitan. "We're using grid computing to facilitate social
networking with high-definition video."

The grid-computing system is able to support the use of online video
available from websites or e-mail, blogs and social networks.

Michael Arrington on TechCrunch described Pando as easy to deploy,
with extremely fast video transmissions. However, he adds that an
effective DRM system will need to be implemented as Pando's
distribution base widens.

The Pando software is available for free, but commercial users will be
charged $5,000 per million deliveries of a 1GB video.

Levitan hastened to add, "Our goal is to eliminate 90%-95% of the cost
of delivering online video."

iPhone’s Newest Crown Jewel Is YouTube

Apple announced Wednesday, that the iPhone will be able to play
YouTube videos when it ships next week. Although only about 10,000
videos from YouTube will be available, the Google subsidiary will be
recoding the rest of its videos into the H.264 format used by the
iPhone by fall.

The format has been praised for its ability to provide exceptional
performance at impressively low data rates. H.264 achieves the
best-ever compression efficiency for a broad range of applications,
such as broadcast, DVD, video conferencing, video-on-demand, streaming
and multimedia messaging.

Apple, and the rest of the mobile community hopes the technology will
truly revolutionize the long anticipated maturity of "third screen"
content and advertising capabilities. The whole enterprise is
dependent on AT&T's relatively slow network. The introduction of the
iPhone will certainly put additional strain on that very network. The
iPhone will also come with Wi-Fi capabilities and may decrease demand
on AT&T's network, if users opt to use Wi-Fi HotSpots instead of the
cellular network.

Capitalizing on such innovations remains in the hands of creative
participants and forward thinking marketing strategist.

Unsurprisingly, Apple Chief Executive Steve Jobs said, "iPhone
delivers the best YouTube mobile experience by far." If he and his
company truly have come-up with another culturally significant devise,
the whole online community stands to benefit, not just Apple.

80% of Men Agree, Online Video Is Attractive

Magid Media Futures conducted a national survey in March that showed
80% of male Internet users between 18 and 24 in the U.S. watch online
video at least once a week. 35% of those men are daily viewers.

Daily usage of online video rose 56% last year amongst users ages
12-64 which is great news for all video advertising. In 2006, 9% of
viewers were classified as daily users where now that has been upped
to 14%. A rise of 18% of weekly use to 52% from last year's 44% was
also included in the report.

The lowest percentage of viewers was from the older female demographic
where the highest percentage was from men 18-64. Regular video viewing
was reported to encompass mostly news stoires with a third of
Americans watching on a regular basis.

Second place was tied by weather, jokes, and movie previews, while
music videos and user-generated content share third place.

This report reinforces that video viewing is not just being done on
YouTube. Online video has become a major component in the future of
online entertainment and advertising. In conjunction with a previous
article of projected ad expenditures, online video is sure to provide
an ideal platform for the evolution of rich media.

Tremor Media Leverages Mirror Image Internet to Ensure Reliable, Uninterrupted Delivery of Video Ads and Online Content

Tremor Media Leverages Mirror Image Internet to Ensure Reliable,
Uninterrupted Delivery of Video Ads and Online Content

Leading online video advertising network effectively addresses
high-volume content delivery needs with Mirror Image's patented
Content Access Point (CAP) Network

Tewksbury, MA (June 18, 2007) - Mirror Image Internet, a leading
provider of content delivery solutions powered by a patented global
network, today announced that Tremor Media, one of the largest online
video advertising networks, is leveraging its patented Content Access
Point (CAP) Network to reliably deliver compelling content and video
ads to users around the world, even during peak traffic periods. In
addition to its own content delivery, Tremor Media is also using the
CAP Network to manage CDN services for a number of its publishing
clients.

Tremor Media gives advertisers and publishers the ability to utilize
online video advertising as a powerful interactive medium. The company
provides advertisers with in-banner and in-stream video advertisement
opportunities on top-tier publisher sites with a combined 75 million
unique visitors per month. To effectively support these high-volume
traffic demands, the company chose Mirror Image's Content Delivery
solution as one of their content delivery partners because it offered
impressive scalability at a price point that was very affordable.
Mirror Image's Global Content Access Point (CAP) Network reliably and
cost-effectively delivers content and accelerates the online user
experience, giving advertisers the ability to capitalize on the
richest interactive media without infrastructure, security or
performance limitations.

"Timely loading of our videos is crucial – not only to the customer
experience but more fundamentally to the ongoing success of our
business," said Jesse Chenard, CTO of Tremor Media. "Mirror Image's
CAP network supports this critical business need flawlessly. Moreover,
their service and support staff has been extremely knowledgeable and
helpful. We've been thrilled with the experience to date and look
forward to continued success in the future."

"For an increasing number of advertisers, profitability is directly
tied to online performance, particularly in the most challenging
environments," said James G. Hart, Vice President, Sales and Marketing
at Mirror Image Internet. "We've brought about the right mix of
connectivity, processing power, and storage to ensure the optimal
customer experience. Our unlimited global capacity and patented
network enable major online video advertisers like Tremor Media to
deliver compelling content at lightning fast speeds, regardless of how
high their traffic grows."

NBC: Over A Third Of A Billion Served

Tuesday, Jun 19, 2007 6:00 AM ET
NBC.COM HAS SERVED A THIRD of a billion video streams since the
network first launched its online video player last October. The
announcement was proudly made by Vivi Zigler, executive vice
president, NBC Digital Entertainment and New Media. Presently, NBC.com
offers full episode streaming for "Friday Night Lights," "Heroes," and
"Last Comic Standing," among others.

Not satisfied with those numbers, though, NBC just partnered with
widget maker Clearspring Technologies to increase the spread of its
content throughout the Web. Through the partnership, users can now
personalize widgets--carrying NBC news, entertainment, and sports--and
post them on their own blogs, social networking profiles, Web sites,
and even wikis.

Today's Most Read

Brightcove Scores Fox Distribution Deal

by Gavin O'Malley, Monday, Jun 18, 2007 6:00 AM ET
IN A MAJOR COUP FOR the aspiring startup, Brightcove has won
video-distribution duties for Fox Entertainment Group.

Now, along with helping Fox's network and studio programmers host
targeted video, Brightcove will let each unit expand its reach through
syndication to select Web site affiliates and through viral
promotion's social media features.

The first Fox properties to incorporate Brightcove's video serving
technology will be FX Networks, SPEED and Fox Broadcasting Company.
Each property is expected to manage its own monetization strategy
through Brightcove's Web TV service.

"Brightcove's tools and services enable us to quickly and easily
deploy broadband video on our network Web sites while retaining
control over the quality, brand experience, and monetization," said
David Baron, vice president, Fox Digital Media.

To harness the present boom in consumer-generated media, Brightcove
will help Fox's units recruit and review user-submitted videos.
Brightcove will then add them to programmed video content featured on
the individual Web sites.

Since its launch last year, Brightcove has attracted a number of
top-tier publisher partners, including Dow Jones, The New York Times
Company and CBS News. Still, Fox represents the company's first major
entertainment media deal.

And Brightcove has no plans to stop there, according to Adam Berrey,
the company's vice president of marketing and strategy.

"We want to power video for all the big networks online," said Berrey.

In an earlier victory this year, the company scored $59.5 million in
investments from the likes of The New York Times Company and top
investment manager AllianceBernstein L.P.

Earlier this year, Brightcove chose video ad network Tremor Media as
its primary ad sales partner, and agreed to carry Tremor's network of
advertisers on its broad content syndication network, which includes
thousands of mid-sized Web sites and blogs.

As a video hub, Brightcove's rivals include YouTube, Metacafe and
Joost. Its video syndication service, meanwhile, competes against Roo
and Broadband Enterprises.

Openads Gets $5M in Funding

Opensource ad server company Openads has secured $5 million in venture
capital funding, reports TechCrunch.

The firm operates an open source ad delivery server whose software is
free to use under a GPL license. The company earns revenue by selling
services that build on the core product.

Openads services 25,000 publishers, with ads running on 100,000
different sites. These includes FM Publishing's sites and about 30
additional ad networks which use Openads as a foundation.

Pre-Roll: Too Few Advertisers, Too Many Videos

by Les Luchter, Friday, Jun 15, 2007 6:00 AM ET
WHILE MORE CONTEXTUALLY TARGETED FORMS of online video
advertising--including tickers, in-screen and bumpers--wait for their
turn to shine, the already "traditional" online format of pre-roll is
suffering from too few advertisers buying up lots and lots of
inventory.

That was the message conveyed by Ari Paparo, vice president of rich
media at DoubleClick, who spoke on the Promax's "Future of Online
Advertising" panel yesterday. "Only 20 advertisers are doing
in-stream," Paparo said--and, ironically for an ad format that closely
mimics traditional TV spots, they're the CPG companies, auto and
finance companies that are "running away from television...They're
buying whatever inventory they can."

Paparo was responding to a question by panel moderator Will Richmond,
the president and founder of Broadband Directions, who wondered why,
although he receives other Internet ads targeted directly to him, he
keeps seeing pre-rolls for tampons.

Eric Druckenmiller, media director for digital agency Deep Focus,
added that "a lot of in-stream advertising is being bought by larger
CPGs without much thought if they're reaching the right audience."

Fred McIntyre, senior vice president of AOL Video, noted just how many
videos are now on the Internet compared to when AOL started to run
pre-rolls just two-and-a-half years ago--in 2006, 2 million videos,
now 20 million, and by the end of the year, an estimated 50 millions.
McIntyre added that AOL's video search engine, which is free to all
takers, now has 40 million unique users.

Paparo pointed out the difficulty of buying video properties that may
be available through five or six portals: "If I want to reach the
'Lost' audience, I may need to make six different deals, with six
different creatives."

A similar media buying dilemma on a much larger scale was expressed
earlier in the day on another Promax panel by Aaron Cohen, executive
vice president of Horizon Media, who said that his agency had seen
presentations from 94 cable networks, five broadcast networks and
seven syndication companies-not to mention print and radio
companies--each of which had a "wheel" offering myriad opportunities
across multiple platforms.

What do we do with 100-plus wheels?" Cohen asked, pointing out the
complexities of both buying and measuring. In order to cope with media
companies that are offering multiplatform opportunities, he said,
media companies need to implement "total integration of online people
with traditional media buyers....From our perspective, we need a
wheel."

NBC Universal sees Web video JV launch in Sept.

NEW YORK, June 14 (Reuters) - Media conglomerate NBC Universal said on
Thursday it expects a new online video venture it is building with
News Corp.(NWSa.N: Quote, Profile, Research) to launch in September.

The two companies announced the venture in March, saying at that time
it would begin operation in the summer of 2007.

The yet-to-be-named Web video outlet aims to compete for viewers with
Google Inc.'s(GOOG.O: Quote, Profile, Research) popular YouTube video
sharing site and other online video outlets under construction by
large media companies.

Ads growing with broadband speed

Ads growing with broadband speed
Bigger files draw more viewers; video spots likely to top $1 bil
By Paul Bond

June 13, 2007
Part One: Web video attracting broad band

If you need evidence for the recent boom in online video streaming,
take a look at Akamai Inc., a company that delivers as much as 20% of
the Web's traffic each day.

At its Web site, visitors can see a snapshot of what's happening on
the Internet each day. One day last week, for example, 728,892 people
were downloading music files every minute worldwide. At one real-time
moment last week, 671,280 people were enjoying rich media, much of it
video, simultaneously. And those numbers don't include files that
Akamai isn't involved in delivering.

The explosive video growth trend is clear during recent months. In
November, Akamai recorded peak moments of rich media streamers at a
rate of about 565,956 per minute, while last month it grew to 974,296
each minute during peak times.

The two major trends in broadband video, according to Tim Napoleon, a
product line director at Akamai, are bigger files and more people
watching them. As for the former, file sizes used to be about 300 kbps
and would typically fill a quarter of a computer screen with video.
Nowadays the more usual is full-screen video at 700 kbps.

"Four years ago it was a challenge at studios to do something as
simple as a movie trailer online," Napoleon said. "Now you can see a
full-length episode of 'Heroes.' "

And better online video is coming quickly. While Leichtman Research
Group said 70% of all U.S. Internet users surf via broadband
connections, these broadband connections aren't nearly as fast as they
could be. Japan, for example, enjoys Internet connection speeds many
times faster than those used by Americans.

Plus, regarding video on the Internet, Napoleon said the great news is
that "there's a business model in place with ad servers. That wasn't
true a few years ago."

Online advertising, according to the Interactive Advertising Bureau,
grew 26%, to $4.9 billion, in the first quarter compared with the same
frame last year. By some estimates, online video advertising -- now
proving its worth -- will account for $1 billion next year and explode
from there.

Media analyst Mike McGuire of Gartner Inc. said Apple Inc.'s Apple TV
and TiVo Inc. are correctly taking a measured approach to moving
broadband content to TV screens. "It's as much research as anything
else," he said. "They're being smart to get it out there and gauge the
response."

According to a report from Wall Street firm Bear Stearns, 33% of
Internet users would prefer to watch online video content on their TV
sets, while 21% said they don't like watching videos on their computer
screens at all.

While no one denies the popularity of online video, important
questions remain: How will it benefit, or hurt, major entertainment
companies? Which revenue models are likely to succeed? And is
user-generated content simply a fad? Bear Stearns addressed each of
these issues in its report.

User-generated content is here to stay, Bear Stearns argues. The firm
said that user-generated content, both the video and text variety,
made up no more than 1% of the content on the Internet in 2004, but
now makes up at least 13%.

But more content also could lead to frustration as consumers fumble
through disappointing videos.

Therefore, Bear Stearns concludes: "In an era of theoretically
infinite video choice, the greatest value can be created not by
producing content but by solving the paradox of choice and connecting
users' individual interests with the vast supply of content."

That's exactly what Steven Spielberg, Ron Howard and their partners
were thinking when they founded the ill-fated Pop.com. But it's only
one reason why video repositories like YouTube and others are so
popular, the other being the quirky user-generated content itself.

According to Bear Stearns, 77% of Internet users call repository sites
of all kinds of video their preferred method for seeking video
content. That's tied for best with links that are forwarded by
friends. And it's better than the 57% who said a search engine is
their preferred method or the 54% who prefer such a major media outlet
as MTV.com or ABC.com.

As for that pesky problem of monetizing online video, Bear Stearns
said that, while paying a la carte or via subscription for content
isn't appealing to consumers, they don't mind 15-second commercials
tacked on to each video, especially if the ads are for something
interesting to them.

On the downside, Bear Stearns sees possible trouble for media
conglomerates because of the migration to online video. Excluding Time
Warner because of its AOL unit, big media companies get only about 2%
of their revenue from digital initiatives, the firm calculates.

"Even assuming 20%-plus annual growth in this revenue stream over the
next five years, this figure would rise to only about 7% of total
sales," according to the report. "The risk is that core revenues
decelerate faster, which is what has happened with newspaper
companies."

KPMG Corporate Finance’s Valuation Update for the Advertising and Marketing Services Industry

Microsoft Corp. (NasdaqNM:MSFT) acquired aQuantive, Inc.,
(NasdaqNM:AQNT) for US$66.50 per share in an all-cash transaction
valued at approximately US$6 billion. aQuantive, Inc., is a global
digital marketing company and is the parent company of Avenue A |
Razorfish, the largest interactive agency in the U.S.; Atlas, a
provider of integrated digital marketing technologies and expertise;
and DRIVEpm, MediaBrokers and Franchise Gator, performance media and
behavioral targeting businesses. The transaction price represents a
premium of approximately 93 percent over aQunitve's prior day's
closing share price. The purchase price implies a revenue multiple of
12.9x and an EBITDA multiple of 56.2x. (May 18, 2007)
WPP Group plc (LSE:WPP) acquired 24/7 Real Media, Inc.,
(NasdaqNM:TFSM) for US$11.75 per share in an all-cash transaction
valued at approximately US$649 million. 24/7 Real Media, Inc. is a
leading global digital marketing company, empowering advertisers and
publishers to engage their target audiences with greater precision,
transparency and return on investment. The offer price represents a
premium of 30 percent over the average closing price of 24/7 Real
Media's shares for the last sixty trading days. The purchase price
implies a revenue multiple of 3.0x and an EBITDA multiple of 103.0x.
(May 17, 2007)
Alliance Data Systems Corporation (NYSE:ADS), a leading provider of
loyalty and marketing solutions derived from transaction-rich data,
has agreed to be acquired by Blackstone Capital Partners V L.P., in a
transaction valued at approximately US$7.8 billion. The purchase price
represents a premium of approximately 30 percent over Alliance Data's
closing share price of US$62.96 on May 16, 2007. The transaction
value implies a revenue multiple of 3.2x and an EBITDA multiple of
13.6x. (May 17, 2007)
Acxiom(r) Corporation (NasdaqNM:ACXM) a provider of customer and
information management solutions, has agreed to be acquired by Silver
Lake and ValueAct Capital, in an all-cash transaction valued at US$3.0
billion. Under the terms of the agreement, Acxiom stockholders will
receive US$27.10 in cash for each outstanding share of stock. This
represents a premium of approximately 14 percent over the closing
share price on May 16, 2007, the last trading day before the intended
transaction was disclosed. The purchase price implies a revenue
multiple of 2.1x and an EBITDA multiple of 7.5x. (May 17, 2007)

For Video Search, Ask.com Doesn't 'Tube; It Blinkx...

Ask.com has partnered with Blinkx to power its video search results,
reports Mashable (via CNN).

Revenue will be split for each sponsored result users click on, as
well as for advertising revenue generated when users go to media
partner sites.

Blinkx has already partnered with search engines MSN and AOL. Other
web partnerships include Sproose, National Geographic, ChaCha,
Quintura and LookSmart.

Blinkx has already gone ahead with its IPO, demonstrating it is ready
to grow the business and become a major competitor to other video
search engines - namely Google's YouTube.

Joost Unveils Ad Targeting Scheme

As it builds still more content providers for its Internet television
platform, Joost is also giving thought to how it plans to deliver
targeted and relevant ads to its viewers, reports The New York Times.

Joost is experimenting with a number of ad formats to extract the best
fit for both advertisers and viewers.

In addition to in-stream 15- and 30-second spots, the company is
serving ads in "bug" format. Bugs are brands that appear as floaters
in the corner of the viewing screen. These typically appear shortly
after an ad for the floating brand has just aired.

Clicking on the bug opens a new browser window that takes viewers to
the product.

The goal at Joost is to find an advertising format that does not
depend on the TV ad model, but is also careful not to dismiss it out
of hand. Ads will largely be targeted to viewers based on personal and
demographic data that users entered when they first registered with
Joost.

Online views

Online video users tend to watch clips fairly frequently, with the
vast majority viewing Web videos at least once a month, according to a
new report by the Online Publishers Association.

Forty-four percent of 1,422 U.S. online video users surveyed by the
OPA reported that they watch clips at least weekly while 73% do so at
least once a month.

What do they watch? News and humor are among the most popular content,
with 14% of online video users reporting that they view news clips
daily, while 45% say they view such at least weekly. Nine percent say
they watch humor videos daily, while 39% watch comic clips at least
once a week.

But even Web video fans haven't yet turned to mobile video. Just one
in five online video watchers (18%) say they watch clips on mobile
devices or MP3s, according to the report. That small group tends to do
so regularly, with 41% reporting viewing mobile video at least once a
week.

Also, the OPA study is bullish on video ads. Eighty percent of
respondents said they had seen video ads, and the majority (52%) of
that group said they took some action, such as visiting a company Web
site (31% of those who took action after viewing an ad), going to a
store to learn more about a product (15%) or making a purchase (12%).

These figures are comparable to those of The Kelsey Group, which also
recently examined online video ads. Like the OPA, Kelsey found that a
slight majority (around 55%) of those who viewed video ads took some
action, such as visiting a Web site (43%), a store (18%), or making a
purchase (15%).

Post your response to the public Online Minute blog.