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.

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 piece on RedHerring.com, Google (Nasdaq: GOOG) is experimenting with approaches to insert ads into video clips. After spending $1.6 billion on YouTube, there is certainly lots of pressure to show that there is a monetization strategy.

The cool thing about Google's new technology is that it allows for playing ads within the video (currently, you need to click a button to see the ad).

So is this the next frontier in advertising?

To get some perspective, I interviewed Dana Ghavami, who is the CEO of CheckM8, a provider of online advertising services):

"Rich media and video advertising represent the greatest future in online advertising, forecasted by eMarketer to exceed display advertising within the next 4 years. Therefore, any company that is serious about taking a controlling interest in the online advertising medium must drive rich media and video ad dollars. Interesting enough, from an industry perspective, you'll notice rich media is no longer a stand-alone vendor solution in the market. It has become integral to ad serving platforms indicating its core value in the industry. However, I see the 30-second clip similar to how traditional forms of advertising (banners and buttons) were simply ported from offline to online without digitizing the opportunity (before the advent of rich media). Google's offering is a me-too proposition. Down the line we
will see more engaging and innovating ways of advertising in online video."

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

When it comes to adopting new technologies, it's often consumers that lead the charge. That appears to be happening with Web 2.0 services, as well as online video.

Well, we are seeing some signs that these things are now invading the corporate walls. In fact, we got evidence of this from the chairman of SAP AG (NYSE: SAP), Hasso Plattner.

His company is a powerhouse in enterprise software and has some of the world's biggest companies as customers. So for SAP, making a change can be a risky proposition.

But, according to Plattner, he actually thinks there is a real opportunity with corporate use of online video. He even mentioned Google Inc.'s (Nasdaq: GOOG) YouTube as a model.

And, I think he's spot on. Let's face it, would you rather read a white paper about data integration or perhaps see a two-minute video on it? How about if the video was from an expert in the field?

Despite the potential, I still think Corporate America will be slow on this – and the innovation will likely come from upstart players.

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

There has certainly been a lot of buzz about Viacom Inc.'s (NYSE:VIA) latest moves with online video. Basically, the company doesn't want to play ball with Google, Inc.'s (NASDAQ:GOOG) YouTube.

For example, Viacom cut a deal with Joost, which is an online video service. And, of course, the company also demanded that Google take-down over 100,000 of its copyrighted videos.

What does this all mean? Well, I had a chance to interview Hilmi Ozguc, who is the CEO of Maven Networks:

First, perhaps provide some background on your company?

Maven enables major media companies to create, distribute and profit from Internet TV. CBS, Sony, A&E, The Weather Channel and many others rely on Maven to power their Internet TV initiatives and the online video advertising revenue those generate.

I learned something from Jessica Lee Rose, aka Lonelygirl15, aka Bree. If you make a lie pretty enough, no one will mind being deceived.

Jessica started posting her videos, in character as the 16-year-old home-schooled Midwestern teenager Bree, on YouTube. She used the screenname Lonelygirl15 and became a huge success.

Then one day, she was outed as an actress living in New Zealand. Zoinks! But instead of angering fans and being excoriated by Oprah, Jessica only became more famous and (strangely) kept posting daily videos, still in character. She now posts on her own site, lonelygirl15.com, and hobnobs with the rich and conventionally famous.

Now her video series has reached true entertainment status and she's got guest stars -- most glamorously, Katharine McPhee of American Idol fame. She appears as a girl Bree's roommate (and love interest) Daniel brings home from a bar. Rose is so well-loved despite her deceptions that she was named #1 in Forbes.com's "The Web Celeb 25" ranking, and has been reported to have secured movie deals. Want more indications of fame? A recent Law & Order episode had a character reminiscent of Bree (in the episode, the video star is kidnapped in an elaborate scripted ploy to get "ransom" money from viewers, and inevitably, someone is murdered).

Bree's life, full of mystery and glamour in the midst of an ordinary teen's existence, is everyone's dramatization of their own problems -- the makings of a blockbuster, in my opinion. If you're going to lie on the internet, it seems, make your lie dramatic and beautiful and everyone will love it.

It was a big year for Web2.0, especially with Google's $1.65 billion acquisition of YouTube.

But what about 2007? What can we expect?

I had a chance to interview a variety of top players in the space:

Suranga Chandratillake, founder and CTO of blinx:

In 2006, video sharing was the biggest trend with lots of companies -- especially the smaller sites -- growing really fast, which highlights the demand for online video. We also saw a great jump in user-generated content. But, traditional media and entertainment companies are catching up and seeing the Internet as a great distribution channel. In 2007, we expect to see even more content on the Web -- especially high-quality content -- and a greater need for better video search engines that can help Internet users navigate through the clutter. Also, with the Internet making content creation and distribution cheap, we expect to see a lot of experimentation with the length of videos and advertisements.

This week, at the Web 2.0 conference, a high-profile executive at Google, Inc. (NASDAQ:GOOG), Marissa Mayer, talked about the key to success for YouTube. That is, the popular web site essentially made it very easy for users to post videos. (hey, isn't speed and ease-of-use a key value propositions of the Google search engine, as well?).

However, I think this is half right. After all, there are many sites that are basically YouTube look-alikes. Rather, another key reason for the huge success of YouTube is that it allowed easy uploading of copyrighted content. In other words, why wouldn't people want to view this stuff for free?

Now, with Google's ownership, the company realizes it needs to deal with potential copyright litigation. In fact, in the company's latest quarterly report, there is this eerie statement: "Adverse results in these lawsuits may include awards of damages and may also result in, or even compel, a change in our business practices, which could result in a loss of revenue for us or otherwise harm our business."

To deal with this, YouTube has cut deals with several media companies. However, there is no indication of what YouTube is paying for this.

Also, YouTube has been taking down videos. The problem then is: Doesn't the site get less attractive if there is not as much content?

With the extremely bright programmers at Google, it seems like the company could have built a super-fast video site. But, of course, Google decided to pay $1.65 billion for YouTube.

I think investors should get better explanation for the deal -- other than YouTube was a fast site.

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

It's been very tough for Sony Corp. (NYSE:SNE): a recall of laptop batteries, as well as delays in the launch of the PlayStation 3.

In fact, despite its rich history as a leader in digital technologies, Sony has been a laggard in the revolution in online video. So this year, back n August, the company purchased a video site, Grouper. Actually, in light of Google, Inc.'s (NASDAQ:GOOG) deal for YouTube, the purchase was fairly cheap – only $65 million.

It does look like a smart move. For example, Sony is developing a new channel, "Screen Bites." Basically, the company is leveraging Sony's valuable film library.

Now, the cool thing is that users can take these clips and do mash-ups. Users can also put the clips on their own web pages on MySpace or blogs.

Business model? Well, the hope is that users will eventually start buying the full version of the content. This is a bit of a stretch, but if Grouper can get a ton of traffic, the strategy can work.

And, here's one of the copyrighted videos, you're going to like, I promise:

The Globe and Mail has a great piece on an unsung Internet property: MLB.com.

Of course, with the World Series, it's getting a lot of play right now (last month, according to Comscore MediaMetrix, the site got 10 million user logins).

No doubt, the video library is extensive – including many classic games over the years.

Also, a true baseball nut likes to play with the numbers. MLB.com lets you get tons of real-time stats while a game is playing. Who's not gonna love that feature?

It's all very cool – and, more importantly, a money maker. Revenues were about $195 million last year.

That certainly should get the attention of other leagues, such as football, soccer and basketball.

OK, if Google Inc.(NASDAQ:GOOG) bought YouTube (which has no profits) for $1.65 billion, what might the valuation be of MLB.com?

It must be a billion-dollar property. And, if I were MLB.com, I would certainly be talking to i-banks right now to draw-up the necessary papers to take it public. The deal could be a grand slam.

Tom Taulli is the author of various books, including the Complete M&A Handbook. He operates InvestorOffering.com.

According to a report from comScore Media Metrix, there were about 1.4 billion video streams in August. Of course, much of this activity came from video sites like Google's YouTube, MySpace and Yahoo!.

To keep the online video revolution moving, there is something very important: editing tools. Basically, editing video is no easy feat, which often requires expensive software and lots of training.

Well, it looks like Adobe Systems, Inc. (NASDAQ:ADBE) saw the opportunity and ceased it. That is, the company recently purchased Serious Magic, which has a variety of video tools, such as Vlog (for editing) and Video Communicator (for clip production).

True, Adobe already has an extensive suite of video tools. However, the surge in online video has been unexpected and Adobe realized there are holes in its product line. While Serious Magic is a small deal, it is important in that it highlights that a big company like Adobe can be quick.

Something else: over time, as online video gets more popular, it should have a bigger impact on Adobe's bottom line. After all, one of the most popular video systems is from Adobe -- that is, Flash.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Lately, YouTube has been getting tons of buzz. But, according to the latest stats from ComScore, MySpace is the dominant site for video.

Is that right? Video?

Yes.

In August, MySpace generated about 1.4 billion video streams, which accounts for 20.1% of the overall US market.

So, the #2 must be YouTube? No, it is actually Yahoo! It's market share was 11.8%. In fact, Yahoo! Inc. (NASDAQ:YHOO) was #1 for the number of users who streamed at least one video.

Rather, YouTube is #3 on the list, with a market share of 9.9%.

Basically, ComScore thinks it is critical to focus on streams (not unique visitors). After all, advertisers want to place ads in streams.

No doubt, the online video space has grown much faster than expected. And, as a result, the metrics that may apply to the traditional online world may not necessarily work with video.

Despite this, the fact remains that YouTube is a major video property. But, at least according to ComScore, MySpace looks like the dominant player. And, while Google spent $1.6 billion for YouTube, News Corp spent "only" $580 million for MySpace.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Google's purchase of YouTube is certainly evidence of the importance of the US online video market.

But, what about China? While there is great opportunity, it is still in the early stages. Also, there is quite a bit of piracy in China. So, it will certainly be challenging to sell premium content via the web.

But that's not a problem for the China's top search engine, Baidu. To this end, the company struck a deal with Viacom to distribute videos and tv shows.

So, you will be able to check-out an MTV channel on Baidu's popular site. There will be about 15,000 hours of content.

While Google has dominated search, the company has had problems getting traction in China. A big part of the reason is the nuances of the market -- which it appears Baidu understands. And, given this deal with Viacom, it looks like Baidu is continuing to think for the long-term – to try to maintain its lead in a market that should grow for many years to come.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.