UPDATED 08:30 EDT / JULY 23 2009

Video Startup Ooyala Achieves Profitability

Mike Arrington over at Techcrunch today noted that video advertising startup Ooyala has achieved profitability.

[Ooyala] hit an important milestone last month – positive cash flow. The company was founded by ex GooglersBismarck Lepe, Sean Knapp and Belsasar Lepe in 2007 and has raised just $10 million in funding.

Every once in a while, I get to say that I picked a winner. Back in 2007, I briefly reviewed Ooyala:

Ooyala takes video advertising to the next level. You hear the terms “revolutionary new concept,” and “industry changing” bandied about as if they were true a lot more often than they actually are. At first blush, and after deeper introspection, I think Backlot, a new video management system from Ooyala, has the potential to live up to these marketing terms.

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At the core of it is the concept of the online video overlay link. This is a business model for monetizing video I was leery of until I read about the success of Blinkx (for reasons explained elsewhere). It looks as if this is a viable candidate for real money with video, though, and Ooyala takes this to the next level by matching concepts, objects, and settings from your viewing experience, and matching them up with advertisers.

If, for instance, you’re watching an episode of CSI, and you notice that really slick dual monitor setup with the ultra-sharp display, and you decide you’d like to play Halo 3 on that, you can simply grab that item and initiate a purchase from the sponsor.

Remember, when this came out, YouTube and video podcasting dominated the online video landscape.  These days we have scads of destination video websites, network and cable TV companies putting shows on the web, and of course Hulu and Joost.

The landscape for a company like this to exist is more or less what I imagined it would be, and the ability to seamlessly and almost transparently monetize video the way Ooyala’s technology allows is a valued asset, obviously bore out by their financial success.


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