AOL, which now operates as a division of media giant Time Warner, said the acquisition will open up fresh opportunities in an area that is pegged for rapid growth over the next couple of years.
The acquisition formally closed on December 21, 2005 and was AOL’s fifth buy last year. While financial terms of the deal have not been disclosed, some industry sources have hinted that it could be the largest since AOL’s $435 million all-cash deal to buy Advertising.com back in 2004.
Founded a couple of years ago, Truveo develops a proprietary visual crawling technology that sifts through video files hosted on web pages to help users find news, sports, entertainment and other online multimedia content from sites like Time Warner’s own CNN, Walt Disney’s ABC and popular Internet search sites like Yahoo! and MSN.
Truveo claims that its technology goes beyond traditional indexing of video search by examining the context of the surrounding web application, which it says often reveals more detailed metadata about the video content.
The company argues that other search engines are not as effective because they typically rely on software that crawls the web, analyzes HTML code sitting behind web pages and identifies any links. The problem with video sites it that the content is presented in a different way that is often invisible to traditional search crawlers and often contain scripts that generate new pages on-the-fly.
Truveo sidesteps the issue by downloading and viewing the entire page, much like a website visitor would, and captures all the scripts, plug-ins and other tools that a traditional text-focused search crawler might ignore. Officials say this makes searches more relevant because more granular data/metadata is provided to the search engine to more accurately describe and classify the video content.
Truveo nicely complements AOL’s November 2003 purchase of Singingfish, which also develops a multimedia search engine that indexes around 2.5 million video files. AOL says it will use Truveo’s technology to enhance its existing video search capabilities.
Truveo’s technology will reinforce AOL’s claim to have the most extensive video content on the Internet, which it says influenced Google and Microsoft’s recent attempts to buy a slice of Time Warner. Google eventually won after agreeing to invest $1 billion for a 5% stake in the media giant. This is expected to pave the way for better integration of AOL’s video content into Google’s own video services.
Truveo’s acquisition also underscores the importance that AOL is giving to online video, especially when used to attract visitors to its own ad-supported websites. AOL has now made online video a key focus of its web portal – part of a year-old strategy to emphasize free content as part of its online advertising business in order to counter its slowing dial-up subscription business.
AOL used its Singingfish acquisition as a springboard to launch its first video search portal in June 2005. The company now boasts a 20,000-item repository of video content. Other video investment include a full-screen video viewer that uses an Hi-Q playback mode and an investment in Brightcove, an Internet TV service provider that distributes video content from independent producers and cable operators. Brightcove is expected to launch later this year.
AOL isn’t the only Internet firm trying to expand its online video capabilities. Yahoo and Microsoft’s MSN Network are also share similar ambitions.
Google recently announced its plans to integrate with content owners such as CBS, which sells video clips through its search site. The Associated Press also recently launched its ad-supported online video news network in partnership with Microsoft. The AP says the service will serve up 50 stories per day and be freely available to its 3,500-odd newspaper and broadcast members.
Other search engines like Yahoo and Blinkx also claim to be hammering out deals to tap into video feeds directly from major news providers.
However, industry analysts say AOL could trump rival offerings by making all the video searchable from one location rather than separate sites.
