Time Warner (NYSE: TWX) movie network HBO will begin testing an online video service. The new project would allow network subscribers to watch programming on their PCs or download them to watch later. According to The Wall Street Journal, "HBO is starting a trial of the service, called HBO Broadband, in Green Bay, Wis., the network says, and could roll it out more widely later this year."

While HBO's brand is well-known among cable subscribers, it is difficult to predict whether this will translate into a large audience online. The amount of premium content available over the internet is growing rapidly as companies like Netflix (NASDAQ: NFLX), Amazon (NASDAQ: AMZN), and Apple (NASDAQ: AAPL) enter the industry. In a field this crowded, newer competitors may have trouble finding audiences.

HBO does have one distinct advantage. Many of the programs on the network are produced for its viewers and are not available elsewhere. This large amount of original content may draw a substantial audience for the new distribution channel.

But the field is getting crowded.

Douglas A. McIntyre is an editor at 247wallst.com.

So far this year, online video is making a big mark. Just look at the Iowa caucuses, where voters posted their efforts on YouTube and then spread them across social networks like MySpace and Facebook. So what else might we see in 2008 for online video?

Well, I had a chance to interview Chase Norlin, who is the CEO of Pixsy (an online video company). According to him:

1. Expect to see continued enforcement by copyright holders over their online video assets; this will drive wider adoption of DRM and licensing platforms.

2. The online video ad category is growing but not at the pace to support the multitude of companies pursuing this market, and a shakeout is therefore likely.

3. More consolidation in the online video space and all other key internet categories.

4. Continued growth in the semipro video publishing market as content producers create and distribute their material in a more cost-effective manner than traditional outlets.

5. More unique video programming, created for the web, making its way to television.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

I'm definitely looking forward to the "Dexter" finale this weekend. The Showtime Networks series is about a serial killer -- who uses his killing talents to snuff other serial killers.

Yes, it's not a typical show. So, maybe that's why the producers are going to do something creative; that is, they have partnered with Meebo to develop a Web 2.0 experience.

So, Dexter fans can chat -- with AIM, Google (NASDAQ: GOOG), MSN and so on -- with executive producers and the talent after the finale.

I had a chance to interview Chase Norlin, who is the CEO of Pixsy (a video search engine), who says:

"This makes perfect sense for Meebo to be in the private label business with instant messaging as the primary application, and certainly seems to be a complement to Showtime Networks' goals. No doubt, video integration into instant messaging applications stands to be a significant trend. Although, in the case of Meebo, I think they will eventually have to offer broader functionality in their private label product in order to win more distribution partners."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

SanDisk (NASDAQ: SNDK) and General Electric's (NYSE: GE) NBC Studios are up to something -- and it sounds like an attack on Apple's (NASDAQ: AAPL) iTunes online audio and video store. After breaking ties with Apple this past summer and no longer supplying its content to the iTunes store, NBC is probably looking for some way to deliver its shows in ways that go beyond mere broadcast television.

Without access to iTunes, NBC risks losing those many viewers who no longer watch much regular television, zap through commercials with their DVRs when they do, and get their video fixes via websites.

So, NBC partners with SanDisk, a company known for making flash computer storage and for being the second-largest seller in the world of digital music players (behind Apple). But here's the catch: the new partnership is about delivering NBC's content to set-top boxes meant for regular television viewing. Huh? Is NBC just looking for some partnership -- any partnership -- so viewers won't forget about its programming?

What happened to the Hulu deal, which sounded more like an iTunes competitor rather than the same old model of delivering content via set-top boxes to customer's television sets? Apparently nothing. Is NBC becoming desperate? Some signs point to yes. Was Apple wise to treat its former content partner like a black sheep? Most signs point to yes.

As of the end of November, internet rating form comScore concluded that Google, Inc.'s (NASDAQ: GOOG) YouTube online video sharing service led all the U.S. online video competition, holding a 27.6% market share in September. It's no surprise -- if I were to ask 10 people where they could go to watch video on the web, my hunch is that at least 9 would say YouTube.

Was YouTube worth the billion-plus that Google paid for it? First-mover advantage is everything, and if Google can find a workable strategy to monetize the site, then most likely the $1.65 billion price tag won't look like very much. comScore also stated that Google-owned sites ranked as the top U.S. video property. In September, there were 2.6 billion videos viewed. 2.5 billion of those were via YouTube. I suspect the other 0.1 billion came courtesy of Google Video.

Coming in behind Google in September was News Corp's (NYSE: NWS) Fox Interactive Media, which includes MySpace, and Yahoo, Inc. (NASDAQ: YHOO), which saw 387 million and 381 million videos viewed, respectively. Is online video beginning to compete more and more with broadcast television? It's not too hard to let the cat out of the bag with that statement, since over 9 billion videos were viewed online in September. An estimated 75% of American internet users participated in all that viewing. Yes, I would say that is competition.

Yahoo! Inc. (NASDAQ: YHOO) shares are trading higher today after the company announced this morning that it has signed an online content deal with Sony BMG, a subsidiary of Sony Corporation (NYSE: SNE). The deal would allow people to upload files with music or video content by Sony BMG artists to Yahoo. Financial terms of the deal were not disclosed, but YHOO said that Sony BMG would receive a cut of advertising revenue. If you think that Yahoo!, won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on the stock.

After hitting a one-year high of $34.08 in October, the stock has declined over the past month. YHOO opened this morning at $26.93. So far today the stock has hit a low of $26.85 and a high of $27.25. As of 11:05, YHOO is trading at $27.09, up 35 cents (1.3%). The chart for YHOO looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

According to today's U.K. Guardian, Google (NASDAQ: GOOG) has been meeting with American Idol guru Simon Fuller about partnering on an internet project that he says is a "big idea on a global scale." While no details were disclosed, Fuller compared the impact of the project to that of iTunes on the music industry.

My first thought was that Google was going into original programming, for which Fuller has been a cash machine. However, a couple of shows, even if very successful, do not the foundations of entertainment shake. Google has also crapped out on a pay-per-view models, and I'd be surprised if that resurfaced. With its purchase of YouTube, though, it owns the mother of all footprints in online video.

As a WAG, perhaps the plan might be more along these lines: A producer creates a show, partners with Google to market it for internet delivery. The show is delivered with advertising content via the Google/YouTube network. For each viewing, advertisers pay a fixed rate, and Google divvies up the ad revenue with the producer. In essence, Google replaces the television network's role, using its ubiquitousness to market content to those it identifies as the most likely to view.

Any plans coming from the Google/Simon confab need to be taken seriously. They are, after all, two American Idols.

Best Buy (NYSE: BBY) has announced a new online video sharing and storage service. The new service, aptly -- and boringly -- named "Best Buy Video Sharing," is being launched in partnership with online hosting company Mydeo (which I suppose is a play on "My Video").

This new service must be geared toward customers who would utilize Best Buy for Business, the retailer's division that markets itself towards small- and medium-sized businesses. I say this because the cost of this new video sharing service -- $6.97 for 100 minutes of video hosting to start -- can't really compete with consumer-level services like Google (NASDAQ: GOOG)'s YouTube and Google Video, which are free.

But then again, many businesses have training needs and other unique needs that would require secure video hosting with long lengths (an hour or more), and this service would appear to be perfect for those needs. However, if Best Buy is trying to crack into the video content consumer distribution business, I fail to see what the point is. Will consumers readily pay for something when the competition gives it away for free? Is history holds, then most likely they will not.

Best Buy should market this new service to the business customer and de-emphasize it to the standard consumer. Whether it does this is anyone's guess.

Back in the 1980s and 1990s, Microsoft (NASDAQ: MSFT) had always known its key focus: do whatever is possible to leverage the operating system.

Well, something similar is happening to Google (NASDAQ: GOOG). The company realizes that when it needs results, it should focus on its advertising machine.

So it's no surprise that the company is adding YouTube videos to the Google AdSense network. There will be both banner and text ads. What's more, it should be an additional source of income for Google's many Web publishers.

Actually, I tried out the system – and it is pretty easy to use (what Google service isn't?) You can see an example at the top left of this post.

What's more, I talked to Chase Norlin about it. He is the CEO and founder of Pixsy (a video search engine). According to him:

"Google acquired YouTube not necessarily for their huge destination site audience, but because they now have the ultimate media aggregation tool for consumer, semipro, and professional content providers. Once the licensing issues are sorted out, Google will have a solid weapon in the content distribution market via AdSense. The challenge, of course, will be to equal or exceed the existing monetization capabilities of the AdSense network."

True, Revver doesn't have the mega brand of Google Inc.'s (NASDAQ: GOOG) YouTube. However, the site has made some online video creators happy; that is, $1 million has been distributed to them.

You see, Revver allows its users to share in revenues generated from advertisements.

True, it's not a lot of money. But keep in mind that the online video market is still in the emerging stages.

Chase Norlin has spent over a decade in the online space. For example, he was a senior business development executive at ValueClick (NASDAQ: VCLK). He also served as an executive at InfoSpace (NASDAQ: INSP). Oh, and he also helped to create Sony's (NYSE: SNE) first online photo sharing service.

His latest gig: Pixsy. It's a fast-growing company in the online video space.

Well, this week, I had a chance to catch up with Chase.

Q: How are things at Pixsy?

A: Image and Video Search are the fastest growing consumer search verticals on the web. In fact, Image Search is 10% of Google's (NASDAQ: GOOG) traffic and grows 100% every year. We said early on, "if image and video search are so popular, why doesn't every website have it?" And that's the driving growth behind our business. Pixsy is unique in that we can provide image and video search to a website, under their brand, with content tailored to that specific vertical, and enable that site to have their media searched or combined with the Pixsy index. All of this provides great value to publishers: new search traffic, users stay on the site longer, new content tailored to that site, and new ad inventory is created. Additionally, the service provides great value to content providers as they receive free, targeted traffic from users performing image and video search queries. We now have a backlog of 8,000 providers trying to get content into the Pixsy index as a result.

Money keeps flooding into the online video sector. And the latest deal is a $34 million round for Dailymotion SA. Investors include Advent Venture Partners LLP and AGF Private Equity.

Interestingly enough, Dailymotion is based in Paris, France. And it's feeling the pressure from Google Inc. (NASDAQ: GOOG)'s YouTube (who isn't?).

Yet, Dailymotion still attracted 14.7 million unique visitors in July. Also, it looks like the company is going to rev up its partnerships.

I had a chance to talk to Chase Norlin, who is the CEO and founder of Pixsy (a multimedia search service). According to him:

"Get big or get out. That's the underlying reasoning behind these large online video financings. The entire space is going to become consolidated, which means that if you haven't hitched your dingy to a cruise ship you're going to be left out on the ocean to fend for yourself. Companies like Dailymotion may need to do acquisitions to bolster their presence in this category as the bigger players stake their turf and own larger portions of the online advertising pie."

If you want to check out more venture capital fundings, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Google Inc (Nasdaq: GOOG)'s YouTube is not the only popular video destination. For example, there is Metacafe, which has more than 25 million unique monthly viewers.

In fact, the company has announced a $30 million found of venture capital from Highland Capital Partners, DAG Ventures, Accel Partners and Benchmark Capital.

Metacafe has built strong community features and also has developed regional versions of the site. It's known as "audience-driven programming."

I had a chance to interview Chase Norlin, who is the founder and CEO of Pixsy (a multimedia search engine). According to him:

"The Metacafe funding makes perfect sense and sends a signal to the market that they're really going for it in the shadow of YouTube. Their prospects look good given they're clearly one of the top 3 players in that category. Paying out users via their Producers program makes a lot of sense; the real question is, how big is the customer generated content market and is there an upcoming saturation of viral video on the web? Given their large audience, the model bodes well if they can make inroads in semipro and professional quality content."

Also, if you want to check out more venture capital fundings, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

This week, a startup company -- adap.tv -- raised $10 million from Redpoint Ventures and Gemini Israel Funds.

The company is trying to get a piece of the growing ad market for video. Hey, with the huge success of Google's (NASDAQ: GOOG) YouTube, it seems like a pretty good idea, right?

The founder of the company, Amir Ashkenazi, does have a lot of credibility. After all, he's the former cofounder of Shopping.com, which sold out to eBay (NASDAQ: EBAY).

But does his new venture really have a chance? I talked to Chase Norlin, who is the CEO of Pixsy, which is a search engine for multimedia. According to him:

"Adap.tv looks a lot like ScanScout, and a variety of other startups looking to become the next 'Adsense for Video.' That space is starting to feel a little crowded to me, not to mention the fact that Google hasn't even entered this market yet. Also, expect the major ad networks and online advertising companies to offer competitive products here as well. I'm sure adap.tv's technology is interesting, but that's not what matters in the online ad space. What matters is publisher reach and a large pool of advertisers to provide solid monetization. That's why companies like ValueClick continue to get stronger despite their non-groundbreaking technology: their advertiser and publisher pool continues to grow and the bigger they get the harder they become to displace."

And, to see more recent venture capital deals, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

According to a report at TechCrunch, Google Inc. (NASDAQ: GOOG) is working on programs that will drive adoption of video advertising online. CPMs, the rate that advertisers charge customers, are estimated to be over $40 for online video. This is much higher than the rate for simple banners.

Google obviously has an edge, if it can come up with a program that both advertisers and content companies will accept. Due to its ownership of YouTube and Google Video, the company has the largest audience for video content. What it still lacks is a broadly accepted program to move TV advertising to the web.

One of the issues facing Google and competitors is whether people are willing to watch ads that are much longer than 10 or 15 seconds. Longer ads clearly offer a better opportunity to explain product features, but if web visitors will not take the time, it does not matter.

The other substantial problem is where the ads go. Do they belong in the programming or in some other spot on the web page.

With display advertising growth rates slowing and text search ads reaching a level where their year-over-year numbers are likely to be less robust, the battle for internet revenue may well turn to video.

Douglas A. McIntyre is a partner at 24/7 Wall St.