Yume Networks, broadband video advertisement network, has announced a major deal with Microsoft. Jayant Kadambi, CEO, made this announcement on Yume corporate blog. This deal will help Microsoft sell unsold inventory across it’s MSN/Live online services.

We are proud to announce not only that we can now offer advertisers MSN inventory, but we have also been selected as the video ad platform to serve and manage all of Microsoft’s unsold and excess video inventory. For little YuMe, this is great validation of our technology, our platform and our business in general. Our network now reaches over 65% of the US online audience; comprises over 120 million unique visitors and continues to offer real scale for targeted, premium ad spending in the US

120 million unique visitors is an impressive number. It also validates potential in this market segment. Yume has received funding from top tier venture including Accel Partners, Khosla Ventures and DAG ventures. With strong cash position, they should be in a position to ride out tough budget cycles in near future.

This announcement is all the more important as this comes close to Google’s confession of poor YouTube’s monetization effort. Did Microsoft anticipate that and made a quick deal with Yume?

Yume competes with Adjustables and Adapt.tv.

In another sign of slowing display ad market, Tiernan Ray writes about Overtures struggle to grow it’s display ad revenue numbers.

“sources” are telling him online advertising is slowing, mostly outside of paid search ads, in areas such as display ads, and online publishers are making less money off each ad. Omniture’s software, which customers use through a Web browser, does things like tell a publisher or advertiser how much time Web surfers spend with ads. Lowy thinks that business is potentially vulnerable. “Despite the great fundamental promise of the space,” he says of Omniture’s market, “and OMTR’s track record and long-term outlook in particular, we do not subscribe to prevailing views that the company is immune to e-commerce and ad budget slowdowns amid a weak economy and the potential inroads by the major search companies, which offer their analytics tools – albeit less feature rich than OMTR’s – for free.” Lowy notes Omniture is trading at almost 5 times sales, 47 times projected earnings per share for this year, and has a P/E-to-growth ratio of 1.3 times, which he thinks leaves “little margin for error.” His 12-month fair-value price is $24.

Surprise is not so much the overall weakening in marketing budget but the enterprise market type dynamics affecting Overture book keeping. Revenue realization is tied to customer going live on Overture platform,

Susquehanna’s Wolk has a different beef. She worries that profit growth may be tempered by investments in R&D, product development, and acquisitions as the company tries to support its torrid rate of growth. Sales rose 82% in 2007, and Wolk projects revenue to be up 115% this year. To keep away from Google (GOOG), which competes with free offerings that overlap with Omniture’s product, the company has to broaden its revenue sources to include professional services and additional software offerings. The investment required to broaden out in that way could “cap” operating profit margin expansion from about 13% of sales this year to a company goal of 20% in coming years, writes Wolk. Specifically, it takes Omniture 90 days to set up a new account on its Web server, but has to invest to build capacity to host those new accounts, leading to a 1 quarter lag before the account is cash-flow positive. “Thus, rapid growth in new customers requires a substantial amount of upfront cash investment.” Wolk thinks the stock is worth between $22 and $25 based on a multiple of projected 2009 Ebitda of between 11 and 18 times.

Margins are under microscope and monetization officers will be well advised to sharpen their spreadsheet.

  FriendFeed got it’s mojo by learning from Facebook’s    extremely popular news feed functionality. Now Facebook getting it’s revenge. One feed at a time, Facebook is adding more feed power in it’s database.  

 

 

Today Facebook Facebook product manager, Peter, announced on his blog that Facebook can now  import activity from YouTube, StumbleUpon, Hulu, Pandora, Last.fm, and Google Reader in addition to Flickr, Picasa, Digg, Yelp and del.icio.us.

This is a big step for Facebook and will go a long way in making Facebook one stop for all friend’s updates. Most importantly it will avoid running out to small sites, which keep popping up nowadays, and leverage investments we have made in Facebook.

Rest of the world, which increasingly matters, has now moved happily into Facebook and Myspace feed world. There is a small group of bloggers who are still throwing around half-baked theories on how FriendFeed is a next Google. It’s a good feed aggregator but to call it “next this” or “next that” is a big stretch.

 

We all know how social computing is changing world and especially world of media. At OpenApp we hope to keep updating you on the constantly changing world of social computing and social media.

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