Who will be the Google of video advertising — inserting ads into the ever-expanding torrent of video on the Web?
If Google has anything to say about it, of course, it will be Google. But that has not stopped a host of specialized start-ups from trying to grab an early lead in the market, perhaps with the ultimate goal of being acquired by a larger Internet company.
YuMe, a six-year-old company based in Redwood City, Calif., is among the most well-capitalized of this lot, and on Wednesday it will announce that it has raised $25 million in additional capital in a round led by Menlo Ventures. Older YuMe backers, including Accel Partners, Khosla Ventures, BV Capital and DAG Ventures, also participated in the funding.
YuMe matches advertisements to videos on such sites as MSN, MSNBC, IDG Entertainment and Glam Media, across multiple devices like PCs, set-top boxes and cellphones. The company says it served an average of 30 million in-stream video ads per day in December, and is now profitable.
“Interactive advertising as a whole category is growing and taking share away from older forms of advertising, and video is the largest advertising category of them all,” said Shawn T. Carolan, managing director of Menlo Ventures, who is joining the YuMe board.
Mr. Carolan added that large media companies may prefer to do business with an independent ad network like YuMe, rather than Internet giants like Google, Yahoo and perhaps one day Apple, which recently acquired a mobile ad firm, Quattro Wireless. “If your core business is producing the world’s best content and making money off content, you need to maintain control of core business. I think YuMe helps them do that better.”
Interestingly, YuMe’s original mission back in 2004 was to create a set-top box to deliver free, ad-supported Bollywood movies over the Internet to home televisions. The company shifted gears soon after, upon realizing the advertising technology for such video advertising did not yet exist — and, perhaps, that the appetite for Bollywood movies, at least in the Western world, was somewhat limited.