For VideoEgg and Its Platform, Ads Trump Content Delivery

As the online video landscape evolves, VideoEgg has shifted its emphasis to promoting its ad network and advertising technologies instead of its video hosting and platform business.

When asked about the change in its business model, Troy Young, VideoEgg’s chief marketing officer, wrote in an e-mail: “We have been really focused on video and rich media monetization technologies and our ad network for quite some time… We are not continuing to invest in the video platform side of the business.”

The company’s shift was pointed out by Alan Brody, organizer of an iBreakfast panel discussion in New York City about the Web video business. Brody said he had heard VideoEgg was no longer taking new clients for content delivery.

When asked about Brody’s comment, Young said today in a phone interview: “We are trying to consolidate our relationships with profitable large partners… We’re focused on higher value ad solutions for brands.”

The online video hosting business, Young said, has become a commodity, much as content management systems did in the late 1990s.

Peter Rautionmaa, Indigo.tv’s CEO and a VideoEgg customer, said it hasn’t been affected by the vendor’s change. However, he said he approached VideoEgg about using its platform for another startup, but was turned away. He’s now looking for a vendor such as Revver, a video sharing network, that can also host online video for mobile phones.

VideoEgg isn’t the only company in the online video segment that’s increasing its advertising focus. There’s Veoh Video Network, which hosts online video from over 100,000 publishers and streams content for larger companies such as CBS and Viacom. Late last year, Veoh introduced advertising on its site, said Gaude Lydia Paez, senior director, public relations, at Veoh.

Earlier this month, VideoEgg rolled out a “per engagement” pricing model on its ad network. In a January interview with ClickZ, Young said VideoEgg was generating about $1 million a month in revenue and was set to deliver a billion impressions a month, as of late 2007.

One Brightcove executive doesn’t see VideoEgg’s change affecting his company’s business. “We’re an Internet TV platform. Essentially, we provide an on-demand platform for publishing, distributing, and monetizing video,” said Adam Berrey, Brightcove SVP, marketing and strategy. Brightcove’s customers and partners — and not Brightcove — sell ads. In contrast, VideoEgg is an ad network.

Berrey heaped praise on VideoEgg for being an innovator in online video advertising. Nonetheless, he said Google’s recent move to launch AdSense for Video would have to be watched as a potential threat to ad networks, including VideoEgg.