The new channel will solicit content via contests that it will hold with partners including HBO, the Style Channel, and others. An editorial team will choose the best videos, which will appear on Comcast’s Video-on-Demand channel, said the company. In a current contest, users can send in videos of their messy homes for a chance to win a home makeover sponsored by the Style Channel show “Clean House.”

Users will also be able to upload videos to a variety of genre categories, including reality, action/drama, and music. Comcast is also planning to add community features to Ziddio which will allow users to talk to each other and rate videos on the site.

Ziddio is the creation of Comcast Interactive Media, a new business division of Comcast launched late last year to build new online services. The site, which will include video advertising, is scheduled to launch in late November or early December, said the company.

Comcast has 21.4 million cable customers, and 8.1 million high-speed Internet customers, according to the company.

Contact the writer:AWeinstein@redherring.com

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Fourth-quarter inventory—particularly video—is tight at several social networking destinations, according to the report. And more marketers are committing money from their advertising budgets to social networks and other user-generated content environments.

“The conversation at marketing firms is not necessarily ‘Why MySpace?’ any more, but ‘How do I use MySpace?’” said Debra Aho Williamson, an eMarketer senior analyst and author of the report.“That change has taken place pretty quickly,” she said.

Events since August led eMarketer to revise its estimates of social network ad spending. Google’s $900 million deal with MySpace, and an overall increase in advertiser interest in MySpace and other social networks like Bebo and Piczo are helping to drive up the numbers.

U.S. marketers are now expected to spend $350 million in 2006, up 25 percent from a previous estimate. The amount that U.S. marketers will spend by 2010 is also up 16 percent to $2.2 billion, according to revised numbers. By 2010, social network ad spending will account for 8.5 percent of the $25.2 billion U.S. online advertising market.

“You’re seeing tremendous growth in these sites in terms of people going to it and the amount of time they’re spending there,” said Ms. Williamson. “Marketers want to be where the people are, and this clearly is somewhere the people are going.”

News Corp’s MySpace, the number one social network, will remain the top destination for ad dollars, according to the report, with $525 million in ad revenue in 2007, up from $180 million in 2006. Ad revenue for sites like Facebook, Bebo, and Friendster should reach $200 million. Social networks from portals like Google (Orkut) and Yahoo (Yahoo 360), and vertical social networks that target dog lovers or car enthusiasts will see an estimated $95 million and $45 million, respectively.

U.S. marketers won’t be the only ones testing the social networking waters, however. International ad spending is also expected to increase as established players launch networks in other countries and languages. eMarketer estimates that worldwide social network ad spending will be $1.1 billion in 2007, up from $445 million in 2006. Spending is expected to rise to $2.8 billion in 2010.

MySpace is live in Australia, France, Germany Ireland, and the UK, and its worldwide visitor count has grown by 245 percent over last year, according to comScore. MySpace launched sites in beta in France and Germany in September, according to MySpace. MySpace is also expected to make an announcement about moving into Asia in the near future.

But social networks will also continue to face some challenges when it comes to drawing marketing dollars. For one, quantifying the results of campaigns on social networks remains difficult, especially for viral campaigns. And marketers need to figure out how they will respond to consumers’ discussions of their brands—especially if it is negative.

“We’re in an age of communication where people feel very comfortable saying what they want to say, and marketers absolutely need to become comfortable with that,” said Ms. Williamson. “It’s great market research and prior to this, marketers didn’t have access to it,” she said. “But it is a double edged sword because you’re getting the raves as well as the cat calls.”

Contact the Writer: AWeinstein@RedHerring.com

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A formal agreement between YouTube’s parent company, Google, and Viacom, has not been announced. But Viacom’s interest in profiting from the popularity of its content on YouTube is evident in a statement issued by the company on Monday.

“We want our audiences to be able to access our programming on every platform and we're interested in having it live on all forms of distribution in ways that protect our talented artists, our loyal customers and our passionate audiences,” Viacom said in a statement sent to Red Herring by spokesperson Jeremy Zweig.

As of Tuesday, a search on YouTube for “The Daily Show” yielded 2,705 videos. A search for “Colbert” produced 2,328 clips. YouTube said it would not comment on the matter.

On Friday, Viacom requested that YouTube remove Comedy Central content, as well as programming from VHI, MTV, BET and Nickelodeon, from its site due to copyright violations.

Comedy Central has its own website, Motherload, where viewers can watch clips of shows with pre-roll commercials. Comedy Central also sells episodes of many of its top shows, including The Daily Show and The Colbert Report, for $1.99 a pop via Apple's iTunes Store.

Many analysts have speculated that without illegally-uploaded content, like the clips from Comedy Central, YouTube may not be able to hang on to its audience. “There is a big risk there for YouTube in terms of its current status as the unchallenged number one site for sharing this kind of video,” said Joe Laszlo, an analyst with Jupiter Research.

YouTube struck a content-sharing deal with broadcast network NBC this summer (see Now Playing: YouTube, NBC). More recently, CBS, Showtime, and CSTV partnered with YouTube to provide short form video clips from shows including CSI, Survivor, and CBS Evening News. YouTube will share any revenue from ads placed next to CBS content uploaded by YouTube users with CBS, and CBS will have the right to remove such content from the site.

More content-licensing deals like those inked with NBC and CBS are likely to emerge, too. Negotiating and deal brokering stepped into high gear following Google’s $1.65 billion acquisition of YouTube in October (see GooTube Feeding Frenzy).

“I think we’ll see a lot of this kind of activity where companies may threaten to sue one day and end up happy partners the next,” said Mr. Laszlo. “All of the major media companies are still feeling their way.”

Contact the writer:AWeinstein@redherring.com

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The free, ad-supported broadband channel, called Super Deluxe, will target men 18-24 with live-action and animated content that will be heavy on gross-out, scatological humor that tends to resonate with a post-collegiate, male audience. The site will also let users build profiles, post videos, and converse with each other.

Super Deluxe is Time Warner’s latest attempt to establish a purely digital brand. In August, Time Warner shuttered its first attempt, Office Pirates, a humor site that targeted a post-collegiate audience with a mix of blog entries and videos. Office Pirates drew 450,000 unique visitors in August, compared with 360,000 in July, and 150,000 in May, but Time Warner felt the brand could not compete with rival sites like Heavy and CollegeHumor.com.

The latest effort, however, differs from Office Pirates by relying on user-generated content, rather than staff-created gags. Turner Broadcasting aims to make Super Deluxe a place where professional and aspiring comics alike can build a following by uploading their material to the Internet. Professional comics will be able to build customized areas on Super Deluxe to promote videos and live appearances. An editorial team will vet all user-generated content to ensure that it does not violate copyright laws and is not offensive.

Unlike the “wild and wooly” environment of user-generated video sites like YouTube that cater to a general audience, Super Deluxe will offer comedy fans a place on the web that is dedicated solely to humor, said Drew Reifenberger, senior vice president and general manager of Super Deluxe. Also, the channel’s connection to Turner Broadcasting will attract content creators who are looking to be discovered.

Advertising on Super Deluxe will include banner ads, and short video ads that will run before and after comedy videos on the site. Users will also be able to become “friends” with advertisers and in exchange, receive special offers on DVDs, or previews of movie trailers, said Mr. Reifenberger.

Super Deluxe-branded content will also be available via multiple digital outlets. Time Warner is in talks with digital media distributors to make Super Deluxe content available via cable TV Video-On-Demand, mobile phones, handheld media devices, and video game consoles.

The network will also allow users to embed videos from the site onto personal web pages, including MySpace and other social networking site profiles.

Contact the writer: AWeinstein@redherring.com

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Flurl is the second acquisition for holding company, Live Universe, which Mr. Greenspan founded in September to invest in U.S. and European video, entertainment, and social networking startups.

Flurl indexes videos from the vast universe of video sharing sites, including YouTube, Veoh, iFilm, and Metacafe, giving videophiles one place to search those sites by categories like “sexy,” “humor,” and “action.” And like content ranking site Digg, Flurl lets users rank the relevance of each video on Flurl, or from other websites via an embedded Flurl widget.

The video search site had 5.6 million unique users in September, according to comScore Media Metrix. The built-in audience gives Flurl an advantage over other players in the video search market. “There are tons of small companies out there working on video search,” said Mr. Greenspan. “This was the only property I’ve seen that has such a large audience already using the product,” he said.

With Google’s recent $1.65 billion acquisition of video site YouTube, the buzz surrounding video search is getting steadily louder. And a host of startups are joining major media players like Yahoo, AOL and Google in the race to build a better video search engine. Blinkx, a San Francisco-based video search site, uses speech recognition and visual analysis technology to compile results. El Segundo, California-based PureVideo Networks pulls feeds from video sites across the web.

“A lot of small startups are feeling the pressure to figure it out now that Google has acquired YouTube,” said Marissa Gluck, an analyst with Los Angeles-based Radar Research.

Flurl does not solely rely on RSS feeds, but also indexes media sites through manual HTML pattern matching to allow more detailed results. In addition to video, Flurl also indexes images, audio, and flash content. “As more and more video is aggregated online, the ability to effectively search through the clutter and find what you are looking for will be critical,” said Flurl CEO Rene Muyrers.

The company that figures out video search stands to reap the rewards of the growing Internet video advertising market. Rich media and video advertising is expected to begin to replace traditional banner advertising on the web, according to the Jupiter Research online advertising forecast.

In 2007, U.S. advertisers will spend $5 million on online video ads. By 2011, the amount spent is expected to grow 160 percent to $1.3 billion. While spending on text ads will continue to represent a greater part of the total online advertising market, the segment is expected to grow at a slower rate—45 percent—over the same period, according to the Jupiter forecast.

Contact the writer: AWeinstein@redherring.com

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The Palo Alto, California-based social network offered the beta service Tuesday to users at the University of California, Berkeley, and StanfordUniversity. Facebook plans to launch Share across the network next week.

The new feature will allow members to share content within Facebook by clicking a “Share” button located next to content on the network, including pictures, videos, and blog entries.

Via a pop-up window, people will be able to preview and edit the content, add comments, and choose whether to post it to their profile page and/or a select group of friends.

Those who want to share content from outside Facebook will need to download a “Share bookmarklet” tool to their web browser or manually paste the link into a Share pop-up window on Facebook. The same pop-up window also gives users the option to tweak the content before they share or post it.

Keeping Track

A Share “Inbox,” located in the left navigation bar on a user’s home page, allows people to keep track of items they’ve sent to others or posted on their profiles.

Facebook appears to be treading lightly when it comes to launching Share—and no wonder. In September, Facebook management opted to launch “News Feed” across the network overnight.

The feature, which notified friends any time a member changed his or her site settings, prompted a large-scale protest by members who claimed it was an invasion of privacy (see Facebook Users Plan Protest). Facebook dropped the plan soon afterward.

Weeks later, the site expanded its user base by allowing individuals in more than 500 regional networks to join. Previously, users had to have an .edu email address, or be part of an organization with its own email domain name (see Facebook Graduates from College).

Facebook, which counts 13 million users, is the No. 2 social networking site behind News Corp.’s MySpace. The company did not comment on rumors that it is in acquisition talks with search giant Yahoo, or that it has set its sights on a $1-billion price tag (see Facebook Is Holding Out).

Contact the writer:AWeinstein@RedHerring.com

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Members of College Tonight will be able to use Juice Wireless’s networking and mobile content-sharing service, JuiceCaster, to access the social network’s features from any mobile phone with a camera and Internet connection.

College Tonight’s features include local campus event listings, a calculator called the “Inebriation Station” that lets users check their approximate blood alcohol content, and a “Crush Calculator,” which lets members reveal and discover their crushes.

“College students use their mobile phones continually throughout the day and night,” said Nick Desai, chairman and co-founder of Juice Wireless. “With Juice Caster, College Tonight users can share everything that happens instantaneously, the moment it happens.”

The Juice Wireless deal will also give College Tonight members the ability to instantly share photographs or send audio “shout-outs” from the parties and events they are attending via their cell phones for free.

Depending on a member’s privacy settings, these items may be viewed by anyone on campus looking for something to do, or a specific group of friends.

Students Only

College Tonight, based in Los Angeles, launched nearly four weeks ago. Unlike MySpace and Facebook, College Tonight is open only to those with an .edu email address.

So far, the service is available on 194 campuses, including the University of Florida and EmoryUniversity. Campus venues, from bars to concert halls, can use the network to advertise anything from special events to happy hour deals to members for a $50 monthly fee. Individuals can also announce parties, events, and other daily happenings.

“We see ourselves as the site that really increases social interactivity,” said Zachary Suchin, president and CEO of College Tonight. “It’s not a site that lassos you to a sedentary lifestyle like the YouTubes, the Facebooks, and the MySpaces.”

And because the network stresses actual social interaction over cyber interaction, user profiles are kept short and basic. There is no place for users to wax poetic about their favorite bands or recap TV episodes.

Mr. Suchin said the site will hire a team of students at each university who will sell memberships, as well as banner ads and video ads, to local venues. Those members also will be responsible for keeping information up to date.

College Tonight is also in talks with film studio Fox Searchlight, Viacom’s MTV, and digital music-downloading site Burn Lounge, said Mr. Suchin, although he declined to offer details.

Still, it’s unclear whether students who already use MySpace and Facebook will want to invest in a new social network.

MySpace and Facebook also offer mobile content-sharing features, and members can communicate similar information to their network of friends, said David Card, an analyst with JupiterResearch.

“The idea of integrating the actual physical world into the virtual community makes a lot of sense, but [College Tonight] needs to prove itself before it will work,” said Mr. Card.

For now, Mr. Suchin and the other eight employees at College Tonight are concentrating on building features to draw users and differentiate the site from the crowd. He is also keeping his eye on the big media companies that may be in the market for a social network.

“All of these companies are looking to find the next potential blockbuster Internet site for very cheap,” Mr. Suchin said, referring to Viacom and other big media companies. “If they show a major financial interest in a site like mine, they’re not going to have to pay $1 billion.”

Contact the writer:AWeinstein@RedHerring.com

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According to a paper published Monday by industry trade organization Digital Watermarking Alliance, film and TV studios, music labels, and other copyright holders can use a process called digital watermarking to keep track of content and prevent it from being illegally traded via the Internet.

In 2005, movie studios lost $2.3 billion worldwide to Internet piracy alone, according to the Motion Picture Association of America. But it’s the music industry that is taking the hardest hit. In 2000, global spending on CDs and licensed digital downloads totaled close to $40 billion. In 2006, that number has fallen to slightly over $32 billion, according to PriceWaterhouse Coopers.

A digital watermark is a digital data element—from a unique serial number to copyright information—that is embedded into the actual content so it survives the copying process. Digital watermarks can be included in video, audio, and still images.

The technology could help content owners collect royalties and charge consumers who trade or download content on P2P or other networks.

“[Digital watermarking] is already in use in many industries for many applications, and it can be used to address this critical need now,” said Digital Watermarking Alliance chairman Reed Stager.

Hollywood studios have used watermarks in the past to keep track of copies sent to members of the Academy of Motion Picture Arts and Sciences. In 2004, actor Carmine Caridi was booted from the Academy and fined $600,000 after a watermark helped studios nab him for allowing a friend to upload his copies to the Internet.

Meanwhile, the situation has gotten even worse thanks to the proliferation of P2P networks and content-sharing sites that let people easily upload and trade copyrighted content online. Last week, YouTube removed 30,000 illegally uploaded videos from its site at the request of a Japanese artists’ group. (see Another 29,549 Bite It).

Why watermark?

Because digital watermarks survive format conversions, media like copyrighted songs, movies, TV or radio programs, and images can be identified on P2P networks and online communities such as MySpace, YouTube, and Google.

Watermark readers, which can be integrated into P2P network software, detect this information in a fraction of a second. The copyright digital watermark with the content ID can be used by the P2P or online provider to determine rights information via a remote database. The watermark also allows users to access any other features attached to that content, including song lyrics, upcoming concert information, or even alternate endings.

The digital data can include copyright information, content classification flags for filtering, content identification, and digital media serial numbers, which would enable content owners to trace illegal content back to the person who uploaded it to the Internet.

While watermarking has helped some media companies trace piracy—it may not be foolproof, said Joe Fleischer, CEO of Big Champagne, a Los Angeles-based company that tracks illegal file sharing activity online.

“Content protection has a history of failure,” said Mr. Fleischer. “If anyone had been truly successful in protecting content, we’d all know him.” Past protection strategies have been beaten by tech geeks, who would likely find a way around this, too, he said.

“The issue is the Internet, which was designed to transfer information between peers,” said Mr. Fleischer. “Stopping that is an incredibly ambitious task.”

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An official from the Japan Society for Rights of Authors, Composers and Publishers said on Friday that 29,549 video clips, including television shows, music videos and movies, were discovered on YouTube in early October.

YouTube has removed the illegal material from its site, according to the AP. The San Bruno-based company did not respond to requests for an interview.

YouTube’s quick response illustrates the company’s willingness to comply with copyright holders’ requests, however YouTube’s woes over the site’s blatant copyright violations are likely just beginning.

Google recently acquired YouTube, which streams more than 100 million videos daily, for $1.65 billion. Now that the young company has Google’s deep pockets behind it, observers say other copyright holders will come forward to request compensation for YouTube’s long-standing policy of turning a blind eye to copyright violations on its site.

“They’re a company that built their business on copyright violations,” said Marissa Gluck, an analyst at Los Angeles-based Radar Research. YouTube’s traffic first began to climb when people flocked to the site to watch the illegally uploaded Saturday Night Live video, Lazy Sunday.

NBC threatened to sue YouTube, which removed the video from its site. YouTube has since signed a content distribution deal with NBC, among others.

Other companies exploring legal actions against YouTube for copyright violations include News Corp., which owns rival video site MySpace, and Time Warner.

The Japanese artists’ group may request that YouTube build a screening process into its site that will prevent copyrighted material from being uploaded. Guba, another video-sharing site based in San Francisco, already employs a digital fingerprinting program that attaches unique data to every video clip uploaded to its site as a way to prevent users from uploading copyrighted material. However, such programs are not fool proof.

“I think these issues are going to linger for a long time,” said Ms. Gluck. “[The networks] are still trying to figure out how to monetize their own content. They don’t want to give it away free to YouTube.”

Contact The Writer: AWeinstein@RedHerring.com

Kevin Poulsen, a senior editor at the Conde Nast-owned technology magazine, reported Monday on WiredNews.com that he wrote a 1,000-line, automated script that matched the names and zip codes of MySpace members with the names and zip codes of 744 sex offenders registered with the Department of Justice’s National Sex Offender Registry.

Wired plans to release the code as open source software this week, said Mr. Poulsen. He has also given a copy of the code to MySpace.

“It’s not a question of saying that MySpace should be shut out,” Mr. Poulsen said, of his experiment’s outcome. “It’s really just an issue of, if you’re going to maintain [a site] like MySpace, you have a responsibility to police it. It’s not clear that they’re doing all they could,” he said.

More than 30 million children younger than age 18, almost half the children in the U.S., use the Internet, according to a study by the NationalCenter for Missing and Exploited Children. One in seven children receives a sexual solicitation online which includes a request to engage in sexual activity, a request to engage in sexual talk, or a request to give out personal sexual information, said the study.

While the presence of sexual predators on MySpace remains an issue, the network has taken steps to clean up its image and tighten security. The social network recently partnered with teen publication Seventeen and consumer safety groups to distribute an Internet safety brochure to help school administrators and parents understand how to report problems on the site, and talk to kids about social networking.

As for the long-term picture, Fox Interactive Media executives are lobbying federal legislators to create an email database for convicted sex offenders, which would be used to remove them from the network. A sex offender who uses an unregistered email address could be arrested and sent to jail—if and when they are detected.

“We are committed to keeping sex offenders off MySpace and are evaluating all functional and scalable solutions. In the meantime, we will delete profiles of any convicted sex offender we find on MySpace,” Hemanshu Nigam, Chief Security Officer for Fox Interactive Media and MySpace, said in a written statement.       

Mr. Poulsen says his code is far from perfect. It netted a large number of false positives, and he had to manually sift through ages, photographs, and other data to find some matches. Also, the code cannot identify predators who register on MySpace with fake information.

Still, the code could be used while legislation is in the works, said John Shehan, program manager for the cybertipline. The cybertipline is a hotline where individuals can report Internet predators run by the NationalCenter for Missing and Exploited Children.

But MySpace seems to be holding out for federal legislation. Fox Interactive Media executives testified before a House subcommittee meeting in June that it could not perform the type of search done by Mr. Poulsen. “That is clearly not true,” Mr. Poulsen said. “Anything I could do they could do much easier and more effectively.”

Contact The Writer:AWeinstein@RedHerring.com

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No one knows for sure, but this September, for the first time, the American networks are moving forward in lockstep to test the waters. All of the major broadcast networks, including ABC, NBC, CBS, the CW, and Fox, are preparing to roll out Internet initiatives to lure back viewers who have migrated to cable TV and the web. The rise of on-demand cable TV, downloading services like TiVo, and user-generated content sites like YouTube lets audiences choose when and where they watch their favorite content. And network executives are terrified.

But unlike record companies that initially fought the Internet, the networks are desperately trying to figure out how to keep pace with consumers’ changing tastes. And their slate of web-based initiatives this fall will be a litmus test of their success at reaching a more tech-savvy audience. The bottom line is that more network programming will be available on the Internet than ever before.

“This year, as we begin to launch our fall shows, we’ve already got a plan in place as to how we’re going to use the Internet and new media,” says Peter Levinsohn, president of Fox Digital Media. “Last year, people were just starting to nip around the edges. This year, it’s happening,” he says.

In previous seasons, the networks dabbled with online content, but their efforts didn’t generate much heat. For example, in 2004, the now-defunct WB network streamed episodes of Jack & Bobby, a show about two brothers, one of whom grows up to be the U.S. president, on AOL for eight days before it premiered to generate an audience. In the end, the show fizzled.

Perhaps online initiatives haven’t taken off until now because audiences were just not ready for the innovation—literally. One of the drivers behind the growth of online video is the widespread adoption of broadband. In January 2004, only 37 percent of Americans had broadband Internet access at home, according to Arbitron/Edison Media Research. In January 2006, that number had more than doubled, to 58 percent of households.

Joe Laszlo, a media analyst with Jupiter research, says networks have indeed turned a corner when it comes to their acceptance of the Internet. “There has definitely been a sea change in the last 12 months as far as the level of commitment in delivering content online,” he says.

Not Tuning In

Networks have little choice but to embrace new technologies. The network television audience in the United States has been on a steady decline for the past decade. In 2001, network TV captured 43 percent of the viewing public. But by 2005, that number had fallen to 33 percent, a 23 percent decline, according to data from Nielsen Media Research.

The slipping numbers are also hurting advertisers—network television’s main source of revenue. Though advertisers are continuing to plunk money into TV commercials—they spent $12.3 billion on network ads in the first half of 2006, up 5.7 percent from a year earlier, according to TNS Media Intelligence—they aren’t getting more bang for their buck. According to a recent McKinsey report, by 2010, traditional TV advertising is expected to be just one-third as effective as it was in 1990. That’s because more people are switching off ads altogether, or not paying attention to them (commercials seem to offer an opportunity to prepare a snack, load the dishwasher, or feed the dog).

Must-See Internet TV

Each of the networks has its own roadmap for winning back viewers online. Most of them have penned non-exclusive deals with media portals, such as Yahoo, AOL, YouTube, and MySpace—as well as launched their own sites—to enable viewers to watch streamed episodes of primetime shows, usually after they air on television. Some are also working with Apple’s iTunes to allow viewers to download the shows. Fox is one of the only networks to stream select shows online—via 48 partner sites—before they premiere on network TV, a strategy the network says will build “buzz” around new shows. NBC recently announced a similar strategy.

CBS will stream primetime programming on Innertube, the network’s online video spin-off, 24 hours after airtime, as well as a simulcast of the CBS Evening News With Katie Couric. “We think we’ll get people who may not normally be exposed to our programs, and that’s not just entertainment, it’s also news and sports,” says Larry Kramer, president of CBS Digital Media. The network has also partnered with Google and Yahoo to promote its fall lineup on their TV sites with video clips, photos, show summaries, and more.

ABC, for its part, has decided to go it alone, and has not partnered with a portal to distribute its content, though some ABC shows will be available for download on iTunes. In September, ABC will re-launch its broadband video player on ABC.com, where viewers can watch free episodes of new and returning shows with short, opt-in ads after the shows air on the network. ABC has yet to announce which shows it will stream on its site. ABC wouldn’t offer specifics on the changes, but Albert Cheng, executive vice president of digital media for the Disney-ABC Television Group, says navigation is improved, and the advertising platform will be slightly different.

When ABC tested the video player during May sweeps last season, traffic to ABC.com more than doubled. “It’s not cannibalistic to our old media, but it actually enhances the value of our content and our network reach,” says Mr. Cheng.

Meanwhile, this summer NBC launched its own channel on video-sharing site YouTube to promote fall shows using exclusive video clips, including audition videos from The Biggest Loser, a weight-loss reality-TV show, and short scenes from new and returning shows such as The Office, a comedy about co-workers at a Scranton, Pennsylvania, paper supply company. The network will also premiere the new drama Heroes, about people who discover they have superpowers, on Yahoo TV on September 18.

Fox started the season by streaming the pilot episode of Vanished, a series about a team of FBI agents who solve missing-person cases, and the season-two premiere of Prison Break, a show about handsome and wrongly convicted brothers, on Yahoo TV, AOL, Google, and other streaming media and download-to-own sites. The shows will also be available on Fox.com, and on local network affiliates’ sites, after they air on the network.

Fox’ strategy of blanketing its content on as many portals as possible is hardly uncommon. In fact, most of the networks seem to have one goal—to get their content onto the Internet as fast as possible. That may be because no one is sure yet which distribution method will prove the most tantalizing to viewers—and the most profitable to the network selling ads.

“Everyone is looking for the newest, most effective gimmick to drive awareness,” says Marissa Gluck, a media analyst with Los Angeles-based Radar Research. “What better advertisement is there for your media than the media itself?”

Throwing Spaghetti Against a Wall

Networks realize that advertising dollars are quickly migrating to the Internet, and they are hoping to capitalize on the trend. In 2006, online advertising spending increased 23 percent year-on-year to $15.7 billion, and that number is expected to continue growing at a rapid pace. By 2010, that figure will reach more than $26 billion, or 8 percent of total advertising spending, according to Forrester Research.

Networks are offering advertisers a variety of online options, including video ads that roll before short video clips, as well as opt-in ads embedded within a streaming episode, much like TV commercial breaks. They are also promoting shows with banner ads on highly trafficked social networking sites like MySpace. Spokesmen for CBS, NBC, ABC, and Fox said they could not comment on their networks’ plans to divvy up revenue from advertising placed alongside or embedded in content streamed on third-party sites. “This is also a test for the advertising story, and what will be effective advertising on the web,” says Mr. Kramer, of CBS.

Analysts say the networks have little to lose by testing myriad new promotion and marketing techniques on the web. “It’s giving them an opportunity to learn how to monetize shows on the Internet while there’s still mostly an upside to be gained,” says Jupiter’s Mr. Laszlo.

But the networks have a long way to go to build a solid online business model. They are still searching for a standard way to measure the monetary value of digital viewers, a complicated business, says Lynn Bolger, executive vice president of agency development at comScore Media Metrix, which tracks Internet traffic.

Ms. Bolger says her company can tailor its online measurement system, called comScore Video Metrix, to tell individual networks who is watching their branded content online, where they are watching it, and for how long. But because networks use different media players, and varying data to identify or “tag” content streams, it will be a long time, if ever, before we see a standard ratings system for online content.

“You’ve got a very fragmented environment out there,” says Ms. Bolger. “The real challenge is how to aggregate the audience in a meaningful way for the advertiser and the marketer.”

Nielsen is working on its own version of online measurement, called A2/M2, an all-electronic measurement system for all forms of streamed video, whether viewers watch it on their computer of a handheld device. But that system won’t be available until the fall 2007-2008 season, says Gary Holmes, a spokesman for Nielsen Media Research.

But discovering how to hook viewers online—and which format will enable networks to sell the most ads—is going to take time. The online medium is distinctly different than the sit-and-zap network world; online viewers seem to have a shorter attention span and prefer clips under five minutes, for instance. It may take a few more years, but networks will find a way to monetize their content online.

“If we fail, we fail, but we learned something,” says Disney-ABC’s Mr. Cheng. “I think you have to go with this approach, otherwise you don’t get a lot done."

Contact the Writer: AWeinstein@RedHerring.com

The ink is hardly dry on Google’s historic $1.65 billion acquisition of video sharing and uploading site YouTube, announced Monday. But just as Google needed YouTube to take the number one spot in online video, it may also need a site like Facebook to become a power player in social networking.

Facebook said it does not comment on rumors. Google did not respond to email.

Sasa Zorovic, an analyst with Oppenheimer, said it is a plausible scenario. “I would say that jives with Google saying, ‘if we want to be number one and it means making acquisitions, then we’ll do acquisitions,’” said Mr. Zorovic.

Google’s own social network offering, Orkut has been a hit in Brazil, but U.S. and European users have not warmed to the site. According to comScore Media Metrix, Orkut had 351,000 unique U.S. visitors in August.

On the other hand, Facebook, which was also recently rumored to be in talks to be bought by Yahoo for $1 billion, is growing quickly. In August, the site had nearly 15 million unique U.S. visitors, according to comScore. Facebook also recently opened membership up to those outside its originally targeted audience of university and high school students, and members of certain organizations.

The acquisition of Facebook could also help Google take on the formidable MySpace, a site that had more than 55 billion unique visitors in August, according to comScore.

But not everyone agrees that Google could be hunting for more booty after YouTube. Jordan Rohan, an analyst at RBC Capital Markets said via email that a brewing Google and Facebook deal is “hard to believe.” Especially at the reported $2.3 billion price tag, he said.

“I don't think Facebook is worth as much as YouTube,” wrote Mr. Rohan.

Valuations can be a tricky however, as players continue to work out ways to monetize user-generated media websites. Still, Google can afford to take its chances: For the six months ended June 30, Google’s revenues increased 78 percent to $4.71 billion. Net income increased 84 percent to $1.31 billion.

Contact the writer:AWeinstein@redherring.com.

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Judge Carolyn Kuhl dismissed Mr. Greenspan’s and other former shareholders’ challenges to the News Corp. deal, finding the acquisition was lawful. She found that the deal had been approved by a majority of Intermix shareholders who were fully informed of the transaction.

Mr. Greenspan has alleged Intermix directors lied to shareholders about the long-term value of MySpace and coerced shareholders into agreeing to the acquisition by News Corp.

“We hope this ruling will finally put an end to Mr. Greenspan’s repeated and unsubstantiated attacks," Mike Angus, general counsel of News Corp.’s Fox Interactive Media, the division at News Corp. that runs MySpace, said in a company statement.

Contact the writer:AWeinstein@RedHerring.com

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