• by Gavin O'Malley  @mp_gavin, April 12, 2010

Video ad network YuMe on Tuesday is expected to announce that its ACE ad platform now supports Microsoft's Silverlight plug-in media player. As such, publishers who equip their Silverlight players with ACE technology will now be able to monetize their video content through YuMe's video ad network, and will have the option to take control of their video ad operations with the ACE Ad Management System.

The deal represents a big win for Microsoft in its ongoing battle against Adobe's omnipresent Flash player. According to Jayant Kadambi, co-founder and president of YuMe: "A growing number of publishers are choosing to use Silverlight."

In September 2007, Microsoft selected YuMe as its ad-serving platform and sales partner for the launch of its Windows Media Center Internet TV offering. Then in June 2008, the companies announced that Microsoft had selected YuMe to help monetize unsold video inventory across its online properties.

"Products like ACE ... help developers use their existing skills," said Brian Goldfarb, director of the developer platform group at Microsoft.

YuMe ranked as the third-largest U.S. video ad network last November, with 73.4 million unique viewers and a potential reach of 43% of online video viewers, according to comScore. YuMe said it served more than 2.5 billion in-stream ads in the fourth quarter of 2009 -- its highest quarterly total to date.

In February, the company closed a $25 million round of funding, led by new investor Menlo Ventures. Existing investors Accel Partners, BV Capital, DAG Ventures and Khosla Ventures also participated in the round.

YuMe's publisher clients include Microsoft's MSN, Msnbc Digital Network, IDG Entertainment and Glam Media, among others.

YuMe presently offers about 20 different ad units spanning different types of pre-, mid- and post-rolls, overlays and page takeovers that advertisers can customize further by choosing different features. The company's broader efforts include encouraging marketers to experiment with different formats and features in video advertising.

Microsoft debuted Silverlight in early 2007. The plug-in for playing media files and displaying interactive Web applications was introduced as part of a full suite of cross-platform Web development tools for both Windows and Mac operating systems.

Today, 71% of the U.S. online audience watches video online, while Forrester expects the number of streams consumed to more than double by 2013. Driving this growth is an explosion of video content from users, professional studios, and marketers.