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3/8/2011
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YouTube Acquires Next New Networks

Google will pay less than $50 million for the company, which has produced viral video hits such as "Bed Intruder" and "Double Rainbow."

Google-owned YouTube on Monday announced it had acquired Next New Networks, cementing a deal rumored to have been in the works since late last year.

The move, first hinted at in December, marks YouTube's first step into content creation. New York-based Next New Networks, whose Web site already positions it as a member of the YouTube family, produced viral hits such as "Bed Intruder" and "Double Rainbow," and in November 2010 launched "The One," a daily Web series for AOL's front page.

Google will pay less than $50 million for the company, the New York Times reported, citing two people briefed on terms of the contract. Next New Networks has raised $26 million from investment firms such as Spark Capital, Fuse Capital, and Goldman Sachs.

"We are extremely excited to announce the acquisition of Next New Networks. Since launching in March 2007, the Next New Networks team has built a highly effective platform for developing, packaging, and building audiences around original Web video programming, attracting over 2 billion views and 6 million subscribers across their partner networks of channels and shows," wrote Tom Pickett, director of global content operations and YouTube Next, in a company blog. "Within YouTube, Next New Networks will be a laboratory for experimentation and innovation with the team working in a hands-on way with a wide variety of content partners and emerging talent to help them succeed on YouTube."

Larry Podell, chairman of Next New Networks, will be director and global head of YouTube Next lab and audience development. In separate but related news, YouTube announced it had hired Alex Carloss, head of digital distribution at Paramount for the past six years -- who also worked at Real Networks and Electronic Arts -- to join the content-acquisition team, working with Robert Kyncl, who moved to YouTube about seven months ago after a seven-year career at Netflix, according to LinkedIn.

YouTube Next is a new team designed to boost the Web site's creator development and speed partner growth and success, Pickett said. The group also will head a series of YouTube Next branded programs and services built off previous partner development initiatives, such as the Partner Grants Program and a program that gave 500 partners $1,000 credits toward new camera equipment at B&H Photo, he said in the blog.

"The YouTube Next team and programs will expand our partner meet-ups and community events, increase investment in partner education and training and launch new capabilities in audience development," Pickett added.

The ultimate goal is to increase the number of video partners generating viable income via YouTube, he said. Although "many" partners made enough money on their video creations to buy a house or build a career, YouTube wants to help them grow those revenues, which were not disclosed, said Pickett.

"In fact, the number of partners making over $1,000 a month is up 300% since the beginning of 2010 and we now have hundreds of partners making six figures a year," he said. "But frankly, 'hundreds' making a living on YouTube isn't enough and in 2011 we know we can and should do more to help our partners grow."

Today, YouTube has more than 10,000 partners -- including entertainment conglomerates such as Disney, Turner, and Univision, YouTube said on its Web site.

In terms of dollars and cents, YouTube monetizes more than 2 billion video-views per week, globally, it said. Around 94% of the top advertisers listed by Advertising Age have run campaigns on YouTube and the Google Display Network. Within the past year, the number of advertisers investing in display ads on YouTube as increased tenfold, according to YouTube.

In the United States, 172 million Internet users watched videos online in November, the ComScore Video Metrix service said in late December. YouTube.com ranked as the top online video content property with 145.8 million unique viewers. Yahoo took the #2 spot with 61.8 million viewers, followed by Vevo with 50.3 million viewers, said ComScore.

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