• by Gavin O'Malley  @mp_gavin, August 14, 2007

Online video technology company VideoEgg has reached a deal with Facebook to sell ads directly into applications developed by the popular social network's community. The move represents an effort by VideoEgg to expand its ad network, the Eggnetwork, which launched last year.

"Aggregating dozens of application owners together in our network will give advertisers reach they need to go deep in any demographic," said Troy Young, chief marketing officer, VideoEgg.

Early advertisers include Discovery Networks, Electronic Arts, Fox Searchlight, FX Channel, Paramount Pictures and Universal Pictures.

VideoEgg is not alone in its access to Facebook's application developers. Three competing ad networks--Lookery, fbExchange and RockYou--presently vie for their attention.

With the Eggnetwork, application providers on Facebook can expect to receive 60% of ad revenue earned, with ads presently selling at above $10 CPM.

Larger application Facebook developers like Rock You, J. Squared Media, Graffitii, Renkoo and Flixster have already signed onto the Eggnetwork.

"The Eggnetwork ad units work very well with the Facebook platform," said Jia Shen, chief technology officer and co-founder of Rock You, Inc., developer and publisher of Facebook applications and widgets.

Founded in 2005, VideoEgg manages the Eggnetwork, along with offering clients opt-in ad technology that stands in contrast to unpopular pre-roll video advertising.

"Our ad units bring targeted, invitation-based rich media experiences to social environments," said Young.

Today, VideoEgg powers 680 million video plays per month, from 23 million unique users. Including more than 80 social networks, its better-known clients include AOL and Bebo.

Video networks in general are booming, with U.S. online video ad expenditures expected to total $775 million in 2007--up 89% from last year, according to market research firm eMarketer. Still, that number only represents about 4% of the projected 2007 U.S. online ad spend of $19.5 billion.

In April, WPP invested an unknown sum in VideoEgg with the intention of exploring its various ad-serving methods.