Online Video Ad Models: The Race is On

Demonstrating an enormous amount of optimism, Eric Schmidt told an audience: "It should be the case that monetizable viewing habits on the Internet should catch up with those on television."

He further added "Our strategy is first and foremost to get as much licensed content on YouTube as possible, index everything, and develop the advertising tools that will allow people to make money." That certainly is a reasonable approach. I mean, they built the entire Google business on that model, first indexing Web sites than developing advertising tools. Well, not developing from scratch, of course. More like liberally borrowing and building out.

But pretty clearly, the race for content is on. Joost's going for, of course, as are a number of other players. Schmidt's optimism is a bit striking. That's the approach we all believed in just before the big crash: content is king, get the people first, monetize it later.

Will this be different? I'm not sure. I do know, at least, that we are building off a model that already has a proven advertising track record, so we should pay attention when Schmidt points that advertisers who value Desperate Housewives watchers will be interested in following them wherever they go.