VentureBeat

It’s official: Maven Networks, a video platform services provider, has sold to Yahoo for around $160 million. I covered the deal in some detail, when news of it leaked a couple of weeks ago.

Maven, which provides video hosting and video ad distribution software to large media companies, had some high-profile investors, including Accel Partners‘ Jim Breyer, who also is a board member and large investor in Facebook, Walmart Stores, Inc., and Marvel Entertainment. I spoke with Breyer this morning to get some context on how Maven fits in with Yahoo, as well as his views on the larger opportunities in the online video market — and Facebook’s own monetization efforts around video.

Accel has been investing in video for close to 20 years, including Macromedia (maker of the Flash online video-playing technology, bought by Adobe), Real Networks, and others. Current investments include user-generated video-sharing site MetaCafe, peer-to-peer file-sharing service BitTorrent and Maven rival Brightcove where Jim also is on the board.

VentureBeat: The word on the street is that many venture-backed online video startups are struggling to monetize, even as their hosting and bandwidth costs eat up their investment dollars. How are online video companies going to turn into big — and profitable — businesses?

Jim Breyer: Monetization is still being defined, and that’s one of the attractions of online video, from an investment standpoint. Nobody has figured out a strong video monetization strategy while seamlessly using the web environment. There’s a lot of experimentation going on, and I expect YouTube to break new ground in terms of how it might work.

The clearest monetization for now, and the most interesting, is happening with technology enablers to major content and advertising companies. Maven and Brightcove are providing hosting and advertising services to these companies, and have fast-growing revenue streams — and they have defensible technology.

There’s no doubt that consumer-facing video sites need to monetize, and that this part of the video market has been overfunded [Breyer notes that consumer-facing video site MetaCafe, a competitor to market leader YouTube, has gained significant traction, especially in Europe].

The adoption prerequisites are in place… standardized video-playing technology like Flash, lower hardware and hosting costs, bandwidth ubiquity, etc. These prerequisites will continue to enable widespread adoption, and new niches will emerge. We expect to do more investments in video companies this coming year.

VB: Maven faces many competitors, including Accel-backed Brightcove — what stands out about it?

JB: Maven, specifically, has developed a nice set of hosted video service technologies, that are defensible, that sit at the intersection of video hosting and distribution. There are a significant number of companies that have wanted to deploy their own video and also pursue a hosted service model. I expect Maven to give Yahoo significant momentum in offering video services, including hosted video and advertising services for Maven clients.

[Maven clients include Fox News, Gannett, Hearst, Sony BMG, Univision, TV Guide, The Financial Times and a long list of other big-media clients. Yahoo plans to pair Maven with its existing video services and ad sales team. More here.]

VB: What opportunities do you see between online video and social networks like Facebook. Example: Will Facebook introduce its own video ad network for video applications on the site?

JB: Video will continue to become more fundamental to social networks, as we’ve seen with the popularity of Facebook’s video-sharing service. Much of our brainstorming at Facebook is in building relationships with third-party application developers — applications that enable video-sharing within Facebook. Through my partners at Accel and through our work on the Facebook Fund investment committee [a fund comprised of Facebook and its venture backers, that invests in promising ideas for applications, our coverage], we are seeing a number of small startups and entrepreneurs working on video-related facebook platform ideas.

Over the long-term, we’ll absolutely have a variety of video ad networks on Facebook — for now, it’s very much about building deep relationships with small video publishers that build engaging content on top of the facebook platform.

updated
1) Online advertising up 28 percent
2) Yahoo confirms $160M acquisition of Maven
3) AOL to launch mobile soc-net platform
4) Starbucks to offer somewhat-free WiFi
5) Topanga, next-gen lighting, funded by Khosla
6) Stealth division at EA making social games
7) Bored.com sells for exciting $4.5 million
8) DanceJam gets another $3.5 million
9) Uncomfortable ads from Facebook
10) Initial review of Android: Not ready yet
11) Motorola and Nortel consider unit merger
11) The long wait for cleantech permitting

Online advertising up 28 percent at end of year — The total US ad spend in the fourth quarter grew almost 28 percent over the same period last year, according to the latest numbers from IDC. The firm also found that Google’s market share declined toward the end of the year.

Yahoo has confirmed its acquisition of Maven Networks – We reported on the deal several days ago, but Yahoo announced this morning the specific price, which we’d only guessed at earlier: $160 million. That’s a big win for General Catalyst Partners, Accel Partners and Prism VentureWorks, which together had invested around $24 million, and apparently had invested most recently in 2006 at at a pre-money valuation of just $30 million (which means they’ve made very nice money). As Dan Primack notes, this is great for GC, which originally invested in 2003 at a $7.5 million pre-money, though interestingly, GC has also pumped a ton of money into Maven competitor Brightcove – including a recent round at around a $210 million post-value.

AOL to launch mobile social networking platform — AOL plans on releasing a mobile software platform for social networking, which will initially work across most of the major device operating systems. The platform will have its own XML-based markup language and server, and be open to developers.

Starbucks begins offering (somewhat) free WiFi — Starbucks will drop T-Mobile and take on AT&T as the partner for its 7,000 United States locations. The upshot: If you’re an AT&T broadband subscriber, WiFi at Starbucks is now free; if not, access is still cheaper. Prices for WiFi in all locations have been steadily dropping, which probably sounds like another nail tapping into the coffin to startups like Fon, which plan on creating large networks of WiFi hotspots.

Topanga high-intensity lighting funded by Khosla — Topanga Technologies is based in Topanga, California. If only everything in life were so simple. We don’t know much more than that it makes high-intensity, discharge lighting, as it’s currently in stealth mode. Khosla Ventures disclosed the investment this morning, alongside its announcement that it hired Ford Tamer.

Stealth division at Electronic Arts making social games — A division called EA Blueprint will make games for distribution on online platforms including social networks, according to a story on Gametap. Blueprint will work together with small developers to create games, some of which will be “brand extensions” of existing EA games. The company, however, declined further comment.

Bored.com sells for exciting $4.5 million — The domain name game is as flush as ever, with the sale of Bored.com having just brought in $4.5 million through auctioneer Moniker. No broken records here, though — Sex.com brought in $12.5 million two years ago. Fittingly enough, the sale price for Business.com fell somewhere in between sex and boredom. (Update: See comments below for more color on the various sale prices.)

DanceJam gets another $3.5 million for dance, jam — DanceJam, which hasn’t even launched yet, has gotten tons of publicity because its founder is MC Hammer, not to mention that Michael Arrington is an investor. That means the site, a community for dancers to upload clips of themselves dancing and rate others, had better be good when it finally does launch. The $3.5 million was provided by Softbank Capital, Rustic Canyon Partners and some new angel investors, according to TechCrunch.

Headhunting ad for Yahoo employees shows up on Yahoo profile – First Round Capital’s Josh Kopelman placed an ad in Facebook, asking Yahoo employees if they might like to leave their increasingly troubled parent to found startups, and he showed evidence that suggested more employees are clicking through than several months ago — a sign of a potential mass exodus at hand. However, turns out the more recent ads — the ones drawing more clicks — were made more enticing because they showed photos of Yahoo employees. This distorted the entire experiment. The ads managed to find its way onto one satisfied Yahoo employee’s profile, occasioning an interesting exchange. “I don’t want my colleagues to think I’m leaving Yahoo, so … I’ve pulled my “Facebook fandom” for First Round Capital,” writes the disconcerted Yahooligan. The ad raises yet more questions about how Facebook can gracefully pipe ads through social network connections. More at Valleywag.

Hands-on review of Google Android in use in Barcelona — Gizmodo has a quick review of a mobile unit with Google Android installed from the Mobile World Congress in Barcelona. From the post: “While the Android platform is solid enough for development and testing, it seems we are far away from seeing actual products getting into the market.”

Motorola and Nortel consider merging wireless units — A combined wireless-infrastructure division between Motorola and Nortel would generate $10 billion in annual sales, part of a proposed restructuring of Motorola under consideration by new CEO Greg Brown. The two company’s units make networking equipment for wireless carriers. The broader plan involves breaking Motorola up into parts, and spinning off the struggling handset-making unit.

Setting up wind turbines? Be prepared for a wait — These lines make the Soviet Union look like child’s play: Developers applying for wind projects in Minnesota face a 612 year waiting list, according to EcoGeek. That’s an extreme example of the bureaucracy that come with issuing permits for new cleantech projects.

update 2/12: The acquisition price has been confirmed at $160 million.

Yahoo is buying a broadband television distribution company called Maven Networks, for $150 million, according to Techcrunch and for between $160 million and $170 million according to NewTeeVee.

If true, Maven will be a promising new way for Yahoo to sell more online video ads that run on large media companies’ videos.

Maven hosts videos for large media companies, then offers ways to syndicate videos, including video ads, online to other web sites well as high-definition downloads — at a tenth of the cost of rival formats, it claims. There are many such companies, meaning the market was crowded and the company sold for a relatively low amount, as WatchMojo points out.

The Boston-based company’s services are already used by Fox News, Gannett, Hearst, Sony BMG, Univision, TV Guide, The Financial Times and a long list of other big clients. Maven is now another reason for these companies to work with Yahoo for online video distribution, and online video advertising, instead of buying their own technology or working with a rival (such as Google or Microsoft).

Large media companies like Maven’s clients are trying to figure out how to distribute and make money on their large stashes of videos, as their television audiences stagnate. The sentiment in the media industry, as we heard from several executives at yesterday’s OnMediaNYC closing panel, was that they don’t care whether revenue comes from their sales teams or outside parties — outside parties like Yahoo, that has its own ad network. “Do you join [the tech companies] or beat them? Beating them is not an option, ” said Alisa Bowen, SVP at Reuters.

Sample Maven ad-insertion screen below:

Meanwhile, Maven is growing at a “breakneck pace quarter to quarter,” co-founder Hilmi Ozguc told NewTeeVee last fall. “Media companies have needs but they don’t have technology experience. It is rocket science, it’s difficult, and that’s what we’re very good at.”

Maven’s content management system was “designed for millions of video assets, millions of video transactions happening simultaneously,” Ozguc told Broadcasting Cable last fall in reference to the company’s deal with Fox. “[Maven] can handle anything from a few sites to hundreds, if not thousands, of sites that are simultaneously pulling video from Fox News, distributing it to a very large audience — both Fox’s own, as well as their affiliates.”

Of course, Yahoo is also a content creator that in some sense competes with these large media companies. “Some of [our media] brands will say “our content is great,” said Caroline Little, CEO and Publisher of The Washington Post and Newsweek Interactive, at the conference yesterday. “And I say, have you looked at Yahoo? It’s pretty good [content] too.” For more VentureBeat coverage of trends online advertising, see Julie Ruvolo’s post from yesterday.

Maven raised a total of $30 million in venture funding, from Accel Partners, General Catalyst, and Prism Ventures.

[Julie Ruvolo contributed reporting to this article.]