Well, many of these online video startups are attracting dollars from some of the biggest venture-capital firms. Redpoint Ventures, an early investor in MySpace, has poured money behind MobiTV. To be sure, investors would rather see these companies go public than be acquired, because it provides them with bigger returns. Bruce Sachs, an investor with Charles River Partners, admits that the recent success of Internet IPOs means the window for going public could be opening.
"Given how hot video is, we could see some interesting exits in 2007," Sachs says. Online video should only get hotter. In-Stat, a Web consultancy, estimates that by 2010, user-generated video sites will reel in 65 billion page views--up from 17 billion this year. Ad revenue growth should be even more robust, the firm says--growing from $80.2 million this year to $852 million by 2010. By any measure, that's solid growth--although admittedly, $80 million is starting with next to nothing. For a little perspective, consider that the click-fraud industry is estimated to make between $300 and $500 million this year.