• by Steve Smith , Staff Writer @popeyesm, October 26, 2006

Video retrieval was the hot property online in 2006 - if you were YouTube. The online video-sharing site was responsible for 45 percent of video search traffic, followed by MySpace (20 to 22 percent) in August, according to Hitwise. By late September, YouTube had notched 46.11 percent.

Google's acquisition of YouTube means that it will command the lion's share of the video search market and make other players also-rans. Media companies are likely to be more eager to cut distribution and copyright deals with the search powerhouse. And Google almost certainly will elbow its way into the video pre-roll ad business, which is precisely the kind of search and ad-matching engine that could power the next generation of ad-supported interactive TV. The move puts Yahoo and Microsoft in the position of either building their own viral video monsters or buying one of the second-tier contenders.

For their part, lesser-known entities like ClipBlast and Blinkx see an opportunity to search aggressively for all video everywhere. After two years of development, ClipBlast debuted in September with a browser toolbar that searches video clips across online providers. As consumers become more comfortable with searching for video, they'll grow frustrated with big search's proprietary silos, says Suranga Chandratillake, CEO of Blinkx. "You won't know where to find shows. We believe we can do for video what Google did with the Web."

Still, online video awaits a business model. Can pre-roll spots pay for the high cost of storage and streaming? Ultimately, video search may produce results pages that leverage consumers' interest in multimedia by serving combinations of relevant text, audio, and video ads in the sponsored slots. But even with hundreds of millions of clips downloaded from YouTube alone each week, video search is far from a reflex. Consumers just don't think of TV, news clips, and how-to demos as searchable Web content. "When that triggers, you will see it grow," says Chandratillake.