Last week online advertising firm Kiptronic was acquired by CDN Limelight Networks for $12M. Now $12M is nothing to sneeze at, but with $7.3M in funding (according to Crunch Base), it’s not quite a home run, either.
In fact, the sale represents the challenge that all video technology platform companies (be it in ad serving or analytics) face: to really scale and becoming meaningful, they need to infiltrate the leading player: YouTube, and the rapidly rising #2: Hulu.
In this case, I imagine Kiptronic felt it was on the outside looking in, and Limelight’s parallel world distribution (via the CDN route) was a viable alternative. I had spoken to Kiptronic in the past and told them that embracing their technology was based on their getting through to YouTube, where we do 40% of our streams (less than most content providers, by the way).
Of course, with YouTube being part of Google, who has its own ambitions in ad serving and analytics, so it will be a cold day in hell before they open up to third parties who either compete with it or might become acquisition fodder for it. Google is a student of history:
- it itself grew thanks to Yahoo!’s naive decision to feature Google’s search technology on the portal, then the largest site in the world.
- and seeing YouTube grow into the $1.65B beast it did thanks to MySpace’s users embedding all of those YouTube embeds, YouTube isn’t stupid enough to let athird party company grow on its coattails.
One of those third parties we work with and root for is Tubemogul. We use their analytics and distribution tools.
Today, TubeMogul announced a series of partnerships with firms like Blip.tv (we use Blip.tv’s amazing video player on our WatchMojo.com property, where we do 3% of our total streams) and DailyMotion (one of our many distribution partners). The two companies will now integrate TubeMogul’s analytics straight into their websites.
We welcome further clarity and transparency in the marketplace, because right now giving advertisers an accurate sense of our total reach of nearly 5M streams per month is challenging.
Taking a step back, I think this reality highlights my belief (albeit biased) that content companies present better investments than technology bets in the video market, for we can tap into YouTube and Hulu’s ecosystem and grow in tandem with at investment levels.
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