Both Silicon Alley Insider and Mashable are reporting that Google is in talks to buy Web video provider for $500 million to $700 million. If true, The move would make Google’s YouTube, the top consumer Web video site, a powerful player in the commercial Web video industry as well. Brightcove CEO Jeremy Allaire says that the company is profitable and cash flow positive. Analyst estimates put Brightcove on pace to do $80 million in sales this year—which would put this deal around 6-9X revenue.
To date, Brightcove has raised approximately $91 million in venture capital. For those unfamiliar with the service, Brightcove is essentially the YouTube of business to business video, powering video streaming on large sites like AOL, The New York Times and The Washington Post. And if completed, such a deal would give Google significantly more reach in online video. (more…)
Interesting TechCrunch report on web video revenues.
Here is the stark reality of online video: nobody is making much money and the enthusiastic projections for online video advertising going from $500 million in 2008 to more than $5 billion in five years will undoubtedly be pared back in the coming weeks as analysts revisit their numbers. (Those numbers are from August—eMarketer).
The writing is already on the wall. YouTube is resorting to selling off video search results to the sexiest bidder and just today announced that it is extending overlay ads in YouTube Partner videos to embedded videos on other sites (previously these would only show up on YouTube itself). It is pulling out all the stops to try to get those revenues flowing. Meanwhile, smaller video startups such as Veoh and Revsion3 have already cut back on staff and shows in order to survive. So you can throw this slide out the window:
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