Video ad enabler YuMe raised a $9M Series B, repeating the trend we saw earlier in file sharing networks, where investment flowed into the leading and more promising file sharing networks while the wannabe has-been’s fizzled and lost relevance.

Looking at the top 10 video sites by market share as of May 2007, it’s interesting to see relatively new media players YouTube, MySpace and Google Video hold on to the top 3 spots, followed by some traditional media players AOL and Yahoo! Videos…

But nestled in the 5 to 10 slots are the second tier challengers Break, Daily Motion, Metacafe, Veoh who have all raised additional funding rounds. It’s certainly odd that the top 2 players are no longer on the market: YouTube exited after “just” $11.5M in funding from Sequoia and MySpace, of course, that is part of News Corp.

But it’s clear that VCs are betting that one or a couple amongst Break, Daily Motion, Metacafe, Veoh can be relevant. Of course, this means it’s tougher for the 180 or so other video file sharing sites to stick around, time will tell (WatchMojo.com partners with about 30 or so of these and I can place bets with much confidence on who will remain relevant in a few years time).

Anyway, back to YuMe, their Series B round comes after Video Egg’s Series D and ScanScout’s big investment. Clearly the potential of a $750M US web video market growing to $4.3B by 2011 ($10B worldwide) is interesting and enticing, but look at all of the players in the platform space:

- Brightcove
- Brightroll | see my interview with CEO Tod Saceroti here.
- Video Egg | see my interview with CEO Matt Sanchez here.
- Tremor Media
- Broadband Enterprises
- Yume
- Scanscout
- Google/YouTube
- AOL/Advertising.com/Instream
- VideoMovement
- etc.

Not to mention the video search players:

- Blinkx
- Pixsy
- Podzinger/Everyzing
- Google/YouTube?

Michael Arrington and Henry Blodget do a pretty good job of listings features and business comparisons of the players in the space.

If you believe that web video will one become larger than search ads, and might even one day suck out enough from TV ads, what is basically a $57B market in the US already and a $73B by 2009, then maybe all of this investment is justified.

Time will tell… for the record, I think that web video has definitely the potential to become larger than search ads (but I am biased as a video executive - though we also have search products) but won’t be larger than TV ads, because the web will shrink the ad market by making it more efficient… But, like I said, time will tell.

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