In the news today, Animoto.com just had a birthday bash and a cake with three candles. Animoto is an online resource and application set that allows users to collage together their photos and video then combine it with a soundtrack and text messages. Their engine filters the submitted elements through a randomizing engine and applies a given theme that generates a different movie each time, allowing for almost infinite possibilities.

The first year of Animoto.com (launched Aug 2007) was all about ‘wowing’ our preciously few users with amazing videos every time they used our service. We knew that if users weren’t blown away by their first Animoto video creation that we’d be dead in the water. Since rendering custom videos frame-by-frame on servers is expensive we also needed a working business model out of the gate. We had the audacity to charge for slideshows in an online world that expected everything free! Before the freemium model was widely adopted or proven.

And Animoto has only grown in popularity and resources since then. In fact, as cameras with video features have become more ubiquitous—and that Animoto added the ability to include video clips their second year—almost 20% of all videos produced by them now include at least one video. Their beautiful rendering, capability to include video and photos, has given them a well-boasted 10% conversion rate from people using the free 30 second clip service to go on to buy a credit to make a full movie.

They intend to keep growing their current employee base by 50% yearly—currently at 28 employees and have recently added an office in San Francisco and Singapore but still keep their HQ in New York City.

Much of Animoto’s success can probably be not just attributed to the viral nature of video work, but their underlying infrastructure and technology. They’ve tapped into the power of cloud storage and computing to do powerful things as rendering videos frame-by-frame on the fly is extremely computationally expensive business. It also allows them to leverage a pay-as-you-go model for both business and personal demographics without excessive overhead. Since most cloud storage and computing models build off a service model, when a user pays for a full length movie a chunk of that goes directly to the overhead, leaving the rest to fill out the company’s coffers and stir further innovation.

They do offer a free 30-second clip service for anyone interesting in checking out their capabilities. Make something beautiful today.