The popularity of online video has gone into the stratosphere in recent months. I mean, who hasn’t heard of YouTube at this point?
A particularly timely article on this topic appeared in yesterday’s Wall Street Journal. The article, the second part of a three-part series on online video, highlighted the ongoing battle among the major Web portals to be the top online video destination. Right now, MSN has emerged as the leader mainly because of its ability to accumulate the rights to an array of programming from major TV networks. However, film studios and TV networks are beginning to take a more direct approach to an online video offering. Additionally, sites such as YouTube are attracting significant attention.
So why are major Web portals so interested in online video? Well, as online video as increased in popularity, we’ve also seen an explosion in online video advertising. In fact, according to eMarketer, online video advertising is estimated to be at $385 million in 2006 and is projected to grow to $2.35 billion by 2010.
It will be interesting to see how this battle plays out in the future. As of now, portals like Yahoo! are investing significantly in search technology to improve video-search results. The portals hope to emulate the traditional search advertising business where advertisers sell ads in relevant search results. According to Kevin Conroy, executive vice president at AOL, “…search is going to become as important to video as it has been text.” Yeah. We’re on to that! 
